China warns US it will defend interests as trade war looms
Chinese Vice Premier Liu He, US Treasury Secretary Mnuchin speak over phone
The US has flouted trade rules with an inquiry into intellectual property and China will defend its interests, Vice Premier Liu He told US Treasury Secretary Steven Mnuchin in a telephone call yesterday, Chinese state media reported.
The call between Mnuchin and Liu, a confidante of President Xi Jinping, was the highest-level contact between the two governments since US. President Donald Trump announced plans for tariffs on up to $60 billion (Dh220 billion) of Chinese goods on Thursday.
The deepening rift has sent a chill through financial markets and the corporate world as investors predicted dire consequences for the global economy should trade barriers start going up.
Several US chief executives attending a high-profile forum in Beijing yesterday, including BlackRock’s Larry Fink and Apple’s Tim Cook, urged restraint.
In his call with Mnuchin, Liu, a Harvard-trained economist, said China still hoped both sides would remain “rational” and work together to keep trade relations stable, the Xinhua News Agency reported.
US probe
US officials say an eightmonth probe under the 1974 US Trade Act has found that China engages in unfair trade practices by forcing American investors to turn over key technologies to Chinese firms.
However, Liu said the investigation report “violates international trade rules and is beneficial to neither Chinese interests, US interests nor global interests”, Xinhua cited him as saying.
In a statement on its website, the office of the US Trade Representative Robert Lighthizer said it had filed a request — at the direction of Trump — for consultations with China at the World Trade Organisation to address “discriminatory technology licensing agreements”.
China’s commerce ministry expressed regret at the filing yesterday, and said China had taken strong measures to protect the legal rights and interests of both domestic and foreign owners of intellectual property.
During a visit to Washington in early March, Liu had requested Washington set up a new economic dialogue mechanism, identify a point person on China issues, and deliver a list of demands.
The Trump administration responded by telling China to immediately shave $100 billion off its record $375 billion trade surplus with the United States. Beijing told Washington that US export restrictions on some high-tech products are to blame.
“China has already prepared, and has the strength, to defend its national interests,” Liu said yesterday.
Firing off a warning shot, China on Friday declared plans to levy additional duties on up to $3 billion of US imports in response to US tariffs on steel and aluminium, imposed after a separate US probe.