China warns U.S. trade deals off if tariffs go ahead

Hannah Rogers
June 4, 2018

China has warned that the United States that the outcome of trade talks will be void if Washington imposes trade sanctions including tariffs on Chinese goods, state media reported Sunday quoting a government statement issued at the end of two-day high-level talks between Chinese and usa trade officials.

U.S. Commerce Secretary Wilbur Ross led the U.S. team in negotiations this weekend with Chinese officials after several days of talks by lower-level officials.

But Beijing warned all the results were premised on "not fighting a trade war".

But a short time later China issued a statement through the Xinhua news agency, saying, "If the United States introduces trade sanctions including a tariff increase, all the economic and trade achievements negotiated by the two parties will not take effect".

Xinhua said China's attitude had been consistent and that it was willing to increase imports from all countries, including the United States. The U.S. says China's outsized production artificially depresses global metals prices, endangering U.S. national security by undermining its domestic steel industry.

Beijing said "positive and concrete progress" was made on those issues with details left for "both sides to finalise".

The talks focus on adding details to China's May 19 promise to narrow its politically volatile surplus in trade in goods with the United States, which reached a record US$375.2 billion previous year.

U.S. Commerce Secretary Ross, foreground, is in Beijing for trade talks after Washington ratcheted up tensions with a new threat of tariff hikes on Chinese high-tech exports.

Ross was to have a dinner meeting with Vice-Premier Liu He at the guest house. Washington wants Beijing to narrow its trade surplus.

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USA tensions with China had eased after Beijing promised on May 19 to "significantly increase" purchases of farm goods, energy and other products and services following the last round of talks in Washington.

Following Beijing's announcement, US Treasury Secretary Steven Mnuchin said the dispute was "on hold".

Trump's announcement that he wanted to proceed with tariffs on China came less than two weeks after the two countries had said they were putting threats of tariffs on hold while they continued negotiating.

Last week the White House announced it would impose curbs on Chinese investment and purchases of USA high-tech goods and on visas for Chinese students.

The visit from the large U.S. delegation, with members from several executive branch agencies, came as fears of an all-out global trade war intensified after the European Union, Canada and Mexico drew up retaliatory measures to Washington's stinging steel and aluminium tariffs that went into effect on Friday.

"Tariffs and expanding exports - the United States can't have both", the paper said.

Mnuchin had said on Saturday the United States wanted China to agree to structural change to its economy.

"There are structural changes that allow our companies to compete fairly".

On Saturday, Mattis said the Trump administration's recent decision to disinvite China from an upcoming naval exercise was an "initial response" to Beijing's aggressive activities. Liu's delegation included China's central bank governor and commerce minister. Germany is also hoping its steel exports to the U.S. will be exempted from sanctions.

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