China warns trade deals off if USA imposes tariffs

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US Commerce Secretary Wilbur Ross arrived in Beijing today as he seeks to persuade Chinese officials to import significantly more North American goods and remove structural barriers even as the USA faces pushback over new tariff threats imposed on some of its closest allies. But the truce appeared to end with last week's announcement Washington was going ahead with tariff hikes on technology goods and also would impose curbs on Chinese investment and purchases of United States high-tech exports.

No new agreements were announced, and China warned that it would ditch a previous pledge to buy more American goods if the Trump administration goes ahead with its plan to impose tariffs on $50 billion of Chinese exports later this month.

Beijing warned all the commitments it had made so far were premised on "not fighting a trade war". It also left unresolved the issue of the Chinese telecommunications company ZTE, which had violated sanctions against North Korea and Iran. Since then both the countries have been negotiating to reach an understanding.

The White House announced days before Ross' arrival that it would impose 25% tariffs on USD50 billion worth of Chinese imports despite having previously agreed to put the tariffs on hold.

"But I think China's position in principle is very clear, which is that China's door to dialogue and consultations is always open", Hua said. The prevailing view in the military and intelligence establishment is that China's efforts to outstrip the U.S. in the high-tech sector constitutes a threat to the economic and military supremacy of the United States. Mr Trump has also complained about barriers USA firms face in Europe and elsewhere.

Washington wants Beijing to narrow its trade surplus.

But China has refused to commit to the U.S. demand to slash the gap by $200 billion.

It referred instead to a consensus they reached last month in Washington, when China agreed to increase significantly its purchases of USA goods and services.

U.S. Treasury Secretary Steven Mnuchin said the dispute was "on hold" and the tariff hike would be postponed.

The trade skirmish further escalated when the United States banned ZTE Corp., one of China's biggest telecommunications companies, from purchasing USA components for seven years due to several concerns ranging from security to violating US sanctions.

That led to a tumultuous April, when several tit-for-tat tariffs were threatened involving a swath of industries in both countries, including fruits, nuts, pork, wine, machinery, medical supplies, cars, and chemicals.

Tariffs fell out of favor as global trade expanded after World War II.

Ross nonetheless journeyed to Beijing Friday to work out particulars of the imprecise settlement Mnuchin had earlier cobbled along with the Chinese language vice premier.

"China will carefully evaluate the US measures and relevant impact and retain its rights to adopt relative measures".

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Mr Trump originally imposed the tariffs in March, saying a reliance on imported metals threatened national security. Commerce Secretary Wilbur Ross is leaving Friday for Beijing for talks aimed at preventing a trade war with China.

China's state grains and agricultural trader COFCO has bought cargoes of soybeans from the United States, two sources familiar with the matter said, though future purchases may be jeopardized by renewed trade tensions between them. That would amount to more than one-third of Chinese imports of American goods.

Tensions were high enough following the USA announcements that the administration considered canceling Secretary Ross's trip, according to a person briefed on the matter. "Our established rhythm will not change", Xinhua said. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.

Treasury Secretary Steven Mnuchin, who announced the tariff truce with China, said at the G7 summit in Canada that the United States was pushing for "structural changes" to the Chinese economy. Each statement was met with either retaliatory or conciliatory remarks from Beijing. Before the establishment of the federal income tax in 1913, tariffs were a big money raiser for the US government.

The company's links to North Korea in particular are politically inconvenient for China because Beijing has claimed that China's enforcement of worldwide sanctions against North Korea helped pave the way for the coming summit in Singapore between Trump and North Korea's leader, Kim Jong Un. Treasury Secretary Steven Mnuchin said then that the USA tariffs were suspended and the trade war was "on hold".

At a heated meeting in the Canadian ski resort of Whistler, the European Union and Canada threatened to retaliate against tariffs of 25% on steel and 10% on aluminium, whose implementation Mr Ross announced on Thursday.

German Finance Minister Olaf Scholz voiced the opposition of other members of the G7 to the decision of the U.S. to pull out of the global nuclear agreement with Tehran and the threat by the United States to impose sanctions on European countries that continue to trade with Iran.

President Trump's economic adviser Larry Kudlow dismissed a volley of criticism by Canadian Prime Minister Justin Trudeau as a "family quarrel" and an "overreaction". Germany is also hoping its steel exports to the U.S. will be exempted from sanctions. "It won't be the case that the United States can get whatever they want".

Bruno Le Maire, France's finance and economy minister, also called the USA tariffs unjustified.

Ross is "going there to tread water", the person said, declining to be identified due to the sensitivity of the matter.

However, U.S. President Donald Trump unexpectedly toughened his trade stance this week. "Regardless of the potential detrimental repercussions for each economies, the chance of a full-blown China-U.S. commerce conflict, with tariffs and different commerce sanctions being imposed by either side, has risen considerably".

Before Beijing joined the World Trade Organization in 2001, such "technology transfer" often was an explicit requirement for foreign companies that wanted access to China's state-dominated economy. And by reducing competitive pressure, they give USA producers leeway to raise their prices, too. China also made no mention of any new agreements.

"It would be a lose-lose scenario for the world if the USA and China are unwilling to work together for an inclusive system that both large and small states can benefit from, and where rules apply to all", Ng said.

This article is for general information purposes only.

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