China and the United States have agreed to keep talking about their trade dispute, the Chinese government said on Tuesday, as U.S. President Donald Trump said he thought recent discussions in Beijing would be successful.
The slightly more optimistic comments came after both sides ramped up their trade war, with China announcing details of new tariffs against U.S. imports on Monday, following a U.S. move last week to target Chinese imports.
The U.S. Trade Representative’s office said it planned to hold a public hearing next month on the possibility of imposing duties of up to 25% on a further $300 billion worth of imports from China. Cellphones and laptops would be included in that list but pharmaceuticals would be excluded, the office said.
The prospect of the global economy being derailed by the United States and China sliding into a fiercer, more protracted dispute has rattled investors and sparked a sharp selloff on equities markets in the past week.
“My understanding is that China and the United States have agreed to continue pursuing relevant discussions. As for how they are pursued, I think that hinges upon further consultations between the two sides,” Chinese Foreign Ministry spokesman Geng Shuang told a daily news briefing, without giving details.
But China will not be bullied, he added: “We hope that the U.S. side does not misjudge the situation and not underestimate China’s determination and will to safeguard its interests.”
Sources have said talks stalled after China tried to delete commitments from a draft agreement that its laws would be changed to enact new policies on issues from intellectual property protection to forced technology transfers.
Geng said China had shown sincerity by still sending a high level delegation to the United States for talks last week and that China has remained calm in the face of pressure.
He put the blame on Washington for going back on its word in some previous rounds of talks, including last May, when the two reached an agreement in Washington but then the United States backed out a few days later.
“So you absolutely can’t put the hat on China of reversing positions and going back on one’s promises,” Geng said, adding China had shown goodwill in the talks and kept its promises.
CHINESE RIPOSTE
The Shanghai Composite Index lost 0.7% and the blue chip CSI 300 was 0.6% lower on Tuesday. But both indexes rebounded from opening down 1%, supported by suspected state-backed purchases.
However, the onshore yuan weakened 0.1% to its lowest level since Dec. 27, 2018, trading at 6.8874 per dollar, after the foreign ministry said it hoped the United States would not underestimate China’s determination to defend its interests.
The ruling Communist Party’s official People’s Daily said in a commentary that the United States needed to “give it a rest” with the complaints that it was losing out to China in the trade relationship.
China is not to blame for the huge trade deficit the United States runs, and China was a hugely profitable market for U.S. companies, the paper said, in a commentary published under the pen name “Zhong Sheng”, meaning “voice of China”.
“U.S. consumers, farmers, businesses and so on have become the victims of the trade frictions provoked by the United States. They are not victims of China’s ‘unfair competition.’”
Trump, who has embraced protectionism, also repeated the rhetoric of his “America First” agenda in an string of early morning tweets on Tuesday.
“We are in a fantastic position,” he wrote on Twitter, calling on U.S. companies to make more products in the United States and praising his tariffs on imported steel for boosting domestic producers.
On Monday, Trump said he would talk to Chinese President Xi Jinping at a G20 summit in late June.
“Maybe something will happen,” Trump said in remarks at the White House. “We’re going to be meeting, as you know, at the G20 in Japan and that’ll be, I think, probably a very fruitful meeting.”
Speaking several hours later at a dinner gathering at the White House, Trump said it should be clear in “three or four weeks” if a U.S. trade delegation’s trip to Beijing two weeks ago was successful.
“I have a feeling it’s going to be very successful,” he said.