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All trade progress is off if US imposes tariffs, China says

Chinese President Xi Jinping waves to deputies at the 13th National People's Congress in Beijing on Tuesday, March 20, 2018. (Lan Hongguang/Xinhua/Sipa USA/TNS)
June 04, 2018

All progress made so far in talks between with the U.S. over trade will be for nothing if President Donald Trump carries out his threat to impose tariffs, China said Sunday.

“If the U.S. rolls out trade measures including tariffs, all the agreements reached in the negotiations won’t take effect,” the state-run Xinhua News Agency reported Sunday, citing a statement from the Chinese negotiators who met with a U.S. delegation led by Commerce Secretary Wilbur Ross in Beijing over t the weekend.

The two sides had good talks about agriculture, energy and other sectors, with some “positive, concrete” progress, Xinhua said. China is willing to expand imports from the U.S. and other nations, it said, though the premise for any agreement is that the two sides won’t start a trade war.

The Xinhua report came after Ross met Sunday with Chinese Vice Premier Liu He for talks that Ross called “friendly and frank, and covered some useful topics about specific export items.”

The U.S. delegation included energy and agriculture experts, reflecting the U.S. desire to increase exports of natural gas and food to reduce the $375 billion annual deficit in commodities trade with China. While the team may be inching toward technical agreement in that direction, the talks are could be overshadowed by the unpredictability of U.S. policy after recent reversals in which tariffs were placed on metals imports by allies.

On the Chinese side, officials including Commerce Minister Zhong Shan, Central Bank Governor Yi Gang, Vice Agricultural Minister Han Jun, and Li Fanrong, vice minister of national energy administration, accompanied Liu in the talks, according to a media pool report.

During his visit, Ross looked to build on a vague joint statement released May 19 after negotiations in Washington. China pledged then to take steps to “substantially” reduce the U.S. trade deficit, including by buying more American farm goods and energy, though it didn’t commit to a dollar amount.

The Trump administration’s shifting stance on China may complicate Ross’s ability to extract concessions from Beijing. Trump announced that the U.S. will go ahead with a plan to impose tariffs on $50 billion worth of Chinese imports just 10 days after the two reached the truce agreement in Washington. China said it would retaliate U.S. tariff threat materialize.

In addition to tariffs, Ross is under pressure from U.S. lawmakers to remain tough on Chinese telecom-equipment maker ZTE Corp. China pressed the U.S. to give ZTE a break after the Commerce Department cut off the company from U.S. suppliers to punish it for allegedly lying to American officials in a sanctions case.

Last month, Trump said he would allow ZTE to stay in business once it pays a $1.3 billion fine, shakes up its management and provides “high-level security guarantees.” Lawmakers from both parties have questioned Trump’s leniency toward ZTE, arguing that the company represents a security risk.


© 2018 Bloomberg News

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