All trade deals could be off, China warns US

Posted June 04, 2018

The warning came after the White House said it is moving forward with a plan to implement steep tariffs on Chinese technology, and as officials from both countries held high-level trade talks. "If the U.S. imposes tariffs on Chinese products, the Chinese side may announce retaliatory measures on American products as well".

Reuters reported last Sunday that Qualcomm was expecting to meet this week in Beijing with China's antitrust regulators in a final push to secure clearance for the deal, but the meeting never materialized and the San Diego-based firm is now waiting to see the outcome of the Ross talks before executives travel to China, a person familiar with the matter said on Saturday.

In the previous round of talks in Washington, China had agreed to greatly increase its imports of U.S. food, agriculture and LNG to reduce the $US375 billion trade in goods imbalance.

"We believe that regarding problems in the China-U.S. trade and economic relations, the two countries should work out a win-win and mutually beneficial resolution through dialogue and discussion with sincerity and in the spirit of equality and mutual respect".

Trump also has threatened to raise tariffs on an additional US$100 billion of Chinese goods, but gave no indication this week whether that would go ahead.

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Ross arrived in Beijing on Saturday for talks after the Trump administration renewed tariff threats against China, and with key USA allies in a foul mood toward Washington after they were hit with duties on steel and aluminum.

US Treasury Secretary Steven Mnuchin said the dispute was "on hold" and the tariff hike would be postponed. "The White House's tariff announcement on May 29 was just part of the negotiations for Wilbur Ross' visit to Beijing as they try to clinch deals that favour the U.S.", he said.

Ross left Beijing for Washington early Sunday evening. But the United States Commerce Secretary appeared to be the only one in a positive mood.

"I want to be clear, this isn't just about [China] buying more goods, this is about structural changes", Mnuchin said.

It referred instead to a consensus they reached last month in Washington, when China agreed to increase significantly its purchases of US goods and services. "Our set pace will not change", it said.

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Trump has pledged to reduce this as well as curtailing President Xi Jinping's "Made in China 2025" program, which will turn the world's second-largest economy into a technological powerhouse.

Ross was accompanied by agriculture, treasury and trade officials for the meeting at the Diaoyutai State Guesthouse, a leafy compound on Beijing's west side.

The US has not released its statement on the talks.

He Weiwen, deputy director of the Centre for China and Globalisation and a former Commerce Ministry official in NY, said Beijing was prepared to take measures to narrow the trade gap but it was also prepared for a trade war.

While many countries share US frustration with Chinese trade and economic practices, critics of USA policy under Trump have warned that Washington risks alienating the European Union, Canada and Mexico with 25 percent tariffs on steel and 10 percent on aluminum.

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