Published: Sun, June 03, 2018
Markets | By Otis Pena

China warns US trade benefits hinge on stopping tariffs

China warns US trade benefits hinge on stopping tariffs

China has warned the U.S. that results of trade talks would be void if the United States went ahead with imposing tariffs on Chinese goods, as negotiations came to an end in Beijing.

Tuesday's announcement revived fears the conflict between the two biggest economies might dampen global growth or encourage other governments to raise their own barriers to imports.

But the cease-fire appears to have ended prematurely. But the truce appeared to end with this week's announcement Washington was going ahead with tariff increases on technology goods and would also impose curbs on Chinese investment and purchases of USA hi-tech exports.

The Trump administration may soon fine ZTE as much as $1.7 billion as it looks to punish and tighten control over the firm before allowing it back into business, people familiar with the matter told Reuters. They said those political pressures mean the technology-related tariff hikes are likely to go ahead.

Some people familiar with the matter have told Reuters that approval may depend on progress of broader talks and a reprieve from a USA government ban on sales by US companies to China's ZTE Corp, penalised for illegally supplying telecommunications gear to Iran and North Korea.

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.

To meet the people's ever-growing needs for a better life and the requirements of high-quality economic development, China is willing to increase imports from other countries, including the United States, which will benefit people of both countries and the rest of the world, it noted.

While the team may be inching toward technical agreement in that direction, the talks are overshadowed by the unpredictability of US policy in the wake of recent reversals that have seen tariffs placed on metals imports by allies.

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The two governments released no schedule for the talks, but China said earlier Ross was due to be in Beijing through to Monday.

China's delegation included central bank governor Yi Gang, commerce minister Zhong Shan, and Ning Jizhe, a deputy head of the powerful planning body the National Development and Reform Commission.

Our meetings so far have been friendly and frank, and covered some useful topics about specific export item.

Ross and the large American delegation had dinner Saturday evening with their Chinese hosts.

The move reflects growing American concern about China's status as a potential tech competitor and complaints Beijing improperly subsidises its fledgling industries and shields them from competition.

Mnuchin, speaking at a G7 finance leaders meeting in Canada where he was the target of USA allies' anger over steel and aluminium tariffs, said the China talks would cover other issues, including the Trump administration's desire to eliminate Chinese joint venture requirements and other policies that effectively force technology transfers.

That might alienate allies who share complaints about Chinese technology policy and a flood of low-cost steel, aluminum and other exports they say are the result of improper subsidies and hurt foreign competitors.

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