Published: Mon, June 04, 2018
Global | By Craig Ferguson

China warns United States sanctions will void trade talks

China warns United States sanctions will void trade talks

China's warning came after delegations led by U.S. Commerce Secretary Wilbur Ross and China's top economic official, Vice Premier Liu He, wrapped up a meeting on Beijing's pledge to narrow its trade surplus.

"Chinese officials know these talks are precarious, but may underestimate the domestic political cost Trump now sees in lifting the ZTE ban without major concessions from China", said Andrew Gilholm, the director of China analysis at Control Risks, a political and security consulting firm. Last month, they held talks in Washington and put out a joint statement.

Private sector analysts say Beijing may be willing to trim its trade surplus, but it will resist changes that might threaten its plans to transform China into a global technology competitor.

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.

This week, the White House renewed its threat to slap tariffs on $50 billion worth of Chinese imports, tighten restrictions on Chinese investments in the United States and stiffen export controls.

The agreement came several weeks after each country threatened to impose $150 billion tariffs on each other's goods and services.

Trade analysts warned Ross's hand might be weakened by the Trump administration's decision Thursday to go ahead with tariffs on steel and aluminium imports from Canada, Europe and Mexico.

Ross had been expected to seek clear commitments from Beijing to boost Chinese imports of USA products in areas such as energy and agriculture.

The American Embassy in Beijing didn't immediately respond to a request for comment.

Ross nonetheless journeyed to Beijing Friday to work out details of the vague agreement Mnuchin had earlier cobbled together with the Chinese vice premier.

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

Treasury Secretary Steven Mnuchin said Saturday the US wants to see "structural changes" in the Chinese economy.

"Our meetings so far have been friendly and frank, and covered some useful topics about specific export items", said Ross at the opening of Sunday's meeting. "Our set pace will not change", it said.

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

Other officials and technical experts from the Department of Commerce, Department of Treasury, United States Trade Representative, Department of Agriculture, and Department of Energy also took part, the White House said.

Addressing Liu earlier in the day at the start of their formal talks at a government guest house, Ross praised the tone of their interactions.

On Sunday, Chinese media reports framed the lack of concrete outcomes in the latest round of talks as Beijing's way of driving home the point that no substantial discussions can take place when the threat of tariffs looms large.

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

The U.S. team also wants to secure greater intellectual property protection and an end to Chinese subsidies that have contributed to overproduction of steel and aluminum.

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.

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