China warns USA trade benefits hinge on stopping tariffs

President Donald Trump's plan to impose tariffs on $50 billion of Chinese exports threatens to wipe out progress made in trade talks between Beijing and Washington, China said on Sunday.

The discussions in Beijing, led by US Commerce Secretary Wilbur Ross and Chinese Vice Premier Liu He, were meant to ease tensions after Washington said Tuesday it would follow through with tariffs on Chinese imports despite a truce reached between the two sides last month.

"If the United States introduces trade sanctions including tariff increases, all economic and trade achievements negotiated by the two parties so far will be void", said a Chinese government statement issued by the official Xinhua news agency.

Following Chinese Vice Premier Liu He's talks with Ross, China referred instead to a consensus reached last month in Washington, when China agreed to increase significantly its purchases of US goods and services.

Trump is pressing Beijing to narrow its politically volatile trade surplus with the United States, which reached a record $375.2 billion previous year.

Following Beijing's announcement, U.S. Treasury Secretary Steven Mnuchin said the dispute was "on hold".

After it had appeared a trade truce between the two economic heavyweights was on the cards, the White House this week warned it would continue to pursue tariffs on $50 billion worth of Chinese imports, as well as impose restrictions on Chinese investments in the USA and tighter export controls.

There was no immediate comment from the United States delegation on the outcome of the talks. It said the White House also will impose curbs on Chinese investment and purchases of US high-tech goods and on visas for Chinese students.

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.

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 United States 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 $100 billion of Chinese goods, but gave no indication this week whether that would go ahead.

Beijing has resisted USA pressure to commit to a firm target of narrowing its annual surplus with the United States by $200 billion.

On Sunday, he is expected to meet Chinese Vice Premier Liu He, Beijing's lead negotiator in the trade dispute.

Earlier, China responded with a threat to retaliate with higher duties on a $50 billion list of American goods including soybeans, small aircraft, whiskey, electric vehicles and orange juice. Liu's delegation included China's central bank governor and commerce minister.

Ross was scheduled to meet with Liu again on Sunday.

On Friday, the United States' closest allies attacked the Trump administration for imposing tariffs on steel and aluminium imports, with Japan calling the USA actions' "deeply deplorable".

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

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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