China: Trade war aids no one

Hopeful on pact, Trump aide says

BEIJING — A top Chinese official warned Sunday that a “trade war” would harm all sides but gave no indication of Beijing’s possible next move in a spiraling dispute with President Donald Trump over steel and technology.

Speaking to global business leaders at a development forum, Vice Premier Han Zheng appealed for cooperation to make economic globalization “beneficial for all.”

“A trade war serves the interests of none,” Han said at the China Development Forum. “It will only lead to serious consequences and negative impact.”

U.S. Treasury Secretary Steven Mnuchin on Sunday said he’s optimistic that the U.S. can reach an agreement with China that will forestall the need to impose the tariffs Trump has ordered on at least $50 billion of goods from that country.

“We’re having very productive conversations with them,” Mnuchin said on Fox News Sunday, when discussing talks with China. “I’m cautiously hopeful we reach an agreement.”

Mnuchin’s comments came after the U.S. announced a deal with South Korea that he said would limit the amount of steel imported into the U.S.

Han didn’t mention Trump by name or refer directly to the dispute with Washington, but the country’s newly appointed economy czar warned Saturday that Beijing will defend its interests. The government issued a $3 billion list on Friday of U.S. goods, including pork and stainless steel pipes, that it said might be hit by higher tariffs.

The Commerce Ministry said those charges were

linked to Trump’s approval earlier of higher tariffs on steel and aluminum imports. But a bigger battle is brewing over Trump’s approval Thursday of possible tariffs on Chinese goods in response to what Washington says is Beijing’s improper acquisition of foreign technology.

Trump on Thursday also directed Mnuchin to propose new investment restrictions on Chinese companies within 60 days to safeguard technologies the U.S. views as strategic. He has said he also wants a $100 billion decrease in the U.S. trade deficit with China.

Global financial markets have sunk on fears that Chinese retaliation might prompt other governments to raise import barriers, depressing global trade.

Han appealed to other governments to “cooperate with each other like passengers in the same boat” and “make economic globalization more open, inclusive, balanced and beneficial for all.”

However, he also emphasized that China’s income per person still is low, suggesting Beijing is unlikely to offer significant concessions to Washington.

Han repeated promises that China’s planned market-opening would create new opportunities for foreign companies. Business groups have welcomed pledges of change but complain Beijing is moving too slowly, making it unclear whether additional promises will mollify Washington, the European Union and other trading partners.

In a phone call Saturday with Mnuchin, Vice Premier Liu He said Beijing is “ready and capable of defending its national interest and hopes both sides will remain rational,” according to China’s official Xinhua News Agency.

The Treasury secretary said the two countries agree on reducing the deficit to some degree and are trying “to see if we can reach an agreement as to what fair trade is for them to open up their markets, reduce their tariffs, stop forced technology transfer.”

The U.S. will proceed with tariffs “unless we have an acceptable agreement that the president signs off on.”

“We’re not afraid of a trade war, but that’s not our objective,” Mnuchin said. “In a negotiation

you have to be prepared to take action.”

The U.S. trade gap in goods with the Asian power surged 8.1 percent in 2017 to a record $375 billion, according to February data from the U.S. Commerce Department.

SOUTH KOREA

Mnuchin also said Sunday that the U.S. and South Korea reached an agreement on revising the allies’s 6-year-old bilateral trade deal and Trump’s plan to impose tariffs on imported steel.

Mnuchin said U.S. Trade Representative Robert Lighthizer reached “a very productive understanding” with South Korea on the tariffs to reduce imports and the existing trade deal.

“We expect to sign that agreement soon,” Mnuchin said. “South Korea will reduce the amount of steel that they send into the United States as a part of this.” Mnuchin called the agreement “an absolute win-win.”

Trade Minister Kim Hyunchong, arriving back in South Korea from a meeting with counterparts in the U.S. Treasury, also said trade negotiators from the two countries agreed “in principle” on both issues.

While not elaborating, Kim said South Korea made no concessions to further open its agricultural market to U.S. exporters — something he described as a red line. He added that there’s been “no retreat” on tariffs removed in the bilateral deal.

Friction over the deal came about when Trump started to blame the U.S.’s large trade deficit with South Korea on the agreement. The issue has been seen as a potential wedge between the allies as both their leaders plan for expected meetings with North Korean leader Kim Jong Un.

Korea’s trade surplus with the U.S. was about $18 billion last year, down from $23 billion in 2016, according to the Korea International Trade Association. Cars accounted for more than 70 percent of the value of the surplus.

The Trade Ministry said Kim will brief the media on the outcome of the trade negotiation today. Kim’s comments were reported earlier Sunday by Yonhap News Agency.

TECHNOLOGY DISPARITY

In a speech to the Beijing economic forum, Apple CEO Tim Cook acknowledged tensions in Western societies that fuel demands for import

controls and said companies must take action to spread the benefits of globalization more widely.

“Not everyone has benefited like all of us in this room have from technology and globalization, and we all must help to address this disparity,” said Cook, a co-chairman of the event. “Their cause must become our cause.”

A Chinese Communist Party newspaper on Saturday listed U.S. companies that’d be “most damaged” if a trade war began — including Apple Inc., Intel Corp. and Boeing Co. China is Apple’s single most important market outside the U.S.

“The countries that embrace openness do exceptional and the countries that don’t, don’t,” Cook said. “It’s not a matter of carving things up between sides.”

The annual forum, which brings together corporate leaders with Chinese economic officials, usually is used to showcase Beijing’s plans. This year, those include ambitious promises to open financial markets and give entrepreneurs and foreign companies a bigger role in China’s state-dominated economy. This year’s forum has been overshadowed by the growing rancor between Washington and Beijing.

“The business community has always supported the idea that open market foster new ideas and allow entrepreneurship to thrive,” said Cook. “The strongest companies and economies are those that are open — those that thrive on diversity of people and ideas.”

At a conference on “the challenge of global inequality” ahead of the economic forum, Laurence Fink, the CEO of asset manager Black-Rock Inc., pointed to the fall in global financial markets and appealed to the two governments to avoid a “public fight.”

“Dialogue and maybe some adjustment in trade and trade policy can be in order,” Fink told reporters on Saturday.

“It can be done privately,” he said. “The world does not need a public fight in which we reduce mutual opportunity.”