As China fight escalates, ratifying new NAFTA becomes Trump's priority
China’s government says it’s willing to work with the U.S. to end an escalating trade war but blames President Donald Trump’s administration for the collapse in talks and won’t be pressured into concessions.
Beijing released a white paper on Sunday saying the escalating trade war between the world’s two largest economies hasn’t “made America great again” -- appropriating Trump’s 2016 campaign slogan.
The paper instead contends that the trade actions have done serious harm to the U.S. economy by increasing production costs, causing prices hikes, damaging growth and people’s livelihoods and creating barriers to U.S. exports to China. In short, Trump’s tariffs aren’t helping, China concluded.
“It is foreseeable that the latest U.S. tariff hikes on China, far from resolving issues, will only make things worse for all sides,” according to the white paper.
The comments come as both sides continue to escalate their dispute, imposing higher tariffs, suggesting more levies to come, and threatening each other’s companies. While Presidents Xi Jinping and Trump may meet this month at the Group of 20 summit in Japan, there’s no sign that either is looking to de-escalate or resume negotiations.
Takes a Yard
Vice Commerce Minister Wang Shouwen, who led China’s working-level team in the negotiations, denied U.S. accusations that the Asian nation reneged on already agreed provisions. Instead, he accused the U.S. of backtracking repeatedly since 2018 and said when the U.S. is offered an inch, it takes a yard.
“Nothing is agreed until everything is agreed,” he said in Beijing on Sunday. China doesn’t want a trade war with the U.S. but won’t shy away from one, according to the white paper, which asserted China’s right to development and sovereignty.
The White House didn’t respond to requests for comment. Both parties must make compromises in any talks, Wang said, adding that the positions of the two sides need to be equal, and the outcome should be mutually beneficial.
The prerequisite for a trade deal is that the U.S. should remove all additional tariffs, China’s purchases of goods from the U.S. should be realistic, and there should be a proper balance in the text of the agreement, according to the white paper. That repeats previous statements from chief negotiator Vice Premier Liu He and others.
Wang tried to play down concerns that a planned list of unreliable entities that China announced last week will be used to target foreign companies as a retaliation tool in the trade war.
That might be an “over-interpretation,” Wang said, adding that China welcomed foreign firms that operate within the law. “There’s no grounds to blame China” for starting an investigation into FedEx Corp. mis-routing some packages from Huawei Technologies Co., he said.
Expectations were high that a deal would be finalized when a Chinese delegation came to Washington in early May. Major U.S. stock indexes hit record levels in anticipation of an agreement. Since then, the S&P 500 index has fallen more than 6.5 per cent.
But Trump upended the process days before the Chinese team was due to arrive. He issued a pair of tweets on May 5, saying he wasn’t satisfied with the talks and accusing China of reneging on provisions. The U.S. proceeded to raised the tariff rate on US$200 billion in Chinese goods to 25 per cent from 10 per cent and has targeted an additional US$300 billion in products for duties. China has retaliated.
“They probably wish they made the deal that they had on the table before they tried to renegotiate it,” Trump said May 27 at a press conference in Tokyo. “They would like to make a deal. We’re not ready to make a deal.”
The Chinese white paper said at the most recent talks in May, the U.S. used “intimidation and coercion” and “persisted with exorbitant demands, maintained the additional tariffs imposed since the friction began, and insisted on including mandatory requirements concerning China’s sovereign affairs.”
“The Chinese government rejects the idea that threats of a trade war and continuous tariff hikes can ever help resolve trade and economic issues,” according to the white paper.
Instead, Beijing suggested, “the two countries should push forward consultations based on good faith and credibility in a bid to address issues, narrow differences, expand common interests, and jointly safeguard global economic stability and development.”