China warns US trade deals off if tariffs go ahead

Bvolatile trade surplus with the United States, which reached a record $375.2 billion last year.

Tensions eased after China promised on May 19 to “significantly increase” purchases of farm goods, energy and other products and services following the last round of talks in Washington. U.S. Treasury Secretary Steven Mnuchin said the dispute was “on hold” and the tariff hike would be postponed.

That truce appeared to end with Tuesday’s surprise announcement. It said the White House also will impose curbs on Chinese investment and purchases of U.S. high-tech goods and on visas for Chinese students.

Analysts suggested Trump might be trying to appease critics of his administration’s deal to allow Chinese telecom equipment giant ZTE Corp. to stay in business. They said those political pressures mean the technologyrelated tariff hikes are likely to go ahead.

Members of Congress criticized the agreement to lift a ban on sales of U.S. components to ZTE, which admitted violating rules on exports to Iran and North Korea. In exchange, the company is to remove its management team, hire American compliance officers and pay a fine.

Trump has threatened to raise tariffs on a total of up to $150 billion of Chinese goods. Tuesday’s announcement gave no indication whether the other increases might also go ahead.

China has threatened to retaliate by raising import duties on a $50 billion list of American goods including soybeans, small aircraft, whiskey, electric vehicles and orange juice. It criticized Tuesday’s announcement but refrained from repeating its earlier threat.

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

Private sector analysts say while Beijing is willing to compromise on its trade surplus, it will resist changes that might threaten plans to transform China into a global technology competitor.

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. Liu’s delegation included China’s central bank governor and commerce minister.

Ross and Liu held a working dinner Saturday ahead of their talks.

“Our meetings so far have been friendly and frank, and covered some useful topics about specific export items,” said Ross at the opening of Sunday’s meeting.

The U.S. pressure over technology policy reflects growing American concern about China’s status as a potential competitor and complaints Beijing improperly subsidizes its fledgling industries and shields them from competition.

Foreign governments and businesses cite strategic plans such as “Made in China 2025,” which calls for state-led efforts to create Chinese industry leaders in areas from robots to electric cars to computer chips.

Trade analysts had warned Ross’s hand might be weakened by the Trump administration’s decision Thursday to go ahead with tariffs on steel and aluminum imports from Canada, Europe and Mexico.

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

EIJING (AP) — China warned Sunday after another round of talks on a sprawling trade dispute with Washington that any deals they produce “will not take effect” if President Donald Trump’s threatened tariff hike on Chinese goods goes ahead.