China lashed out on Wednesday at renewed threats from the White House on trade, warning that it was ready to fight back if Washington was looking for a trade war – days ahead of a planned visit by US Commerce Secretary Wilbur Ross.
On Tuesday, in an unexpected change of tone, the United States said that it still held the threat of imposing tariffs on $50 billion of imports from China unless Beijing addressed the issue of theft of American intellectual property.
Washington also said that it will press ahead with restrictions on investment by Chinese companies in the United States, as well as export controls for goods exported to China.
Trade War Escalation
Its tougher stance comes as President Donald Trump prepares for a 12 June summit with North Korean leader Kim Jong-un, whose key diplomatic backer is China, and as Washington steps up efforts to counter what it sees as Beijing's efforts to limit freedom of navigation in the South China Sea.
The trade escalation came after the two sides had agreed during talks in Washington earlier this month to find steps to narrow China's $375 billion trade surplus. Ross is expected to try to get China to agree to firm numbers to buy more US goods during his June visit to the Chinese capital.
"We urge the United States to keep its promise and meet China halfway, in the spirit of the joint statement," Chinese Foreign Ministry spokeswoman Hua Chunying told a daily news briefing, adding that China would take "resolute and forceful" measures to protect its interests if Washington insists upon acting in an "arbitrary and reckless manner".
"When it comes to international relations, every time a country does an about-face and contradicts itself, it's another blow to, and a squandering of, its reputation," Hua said.
China has said that it will respond in kind to threats by Trump to impose tariffs on up to $150 billion of Chinese goods.
Dashed Optimism
Trade war fears had also receded after the Trump administration said that it had reached a deal to put ZTE Corp back in business, after banning China's second-biggest telecoms equipment-maker from buying US technology parts for seven years.
The easing in tensions had fuelled optimism that an agreement was imminent for Chinese antitrust clearance for San Diego-based Qualcomm, Inc.'s $44 billion purchase of Netherlands-based NXP Semiconductors NV, which has been hanging in the balance amid the trade dispute.
A team of Qualcomm lawyers expecting to meet with Chinese regulators ahead of Ross's arrival remained in San Diego as of late Tuesday, said a source familiar with the matter.
"On hold now," another person familiar with Qualcomm's talks with the Chinese government said on Wednesday, declining to be identified, as the negotiations are confidential.
"Trump is crazy. Crazy tactics might work, though," the person added.
Tariffs And Tactics
William Zarit, chairman of the American Chamber of Commerce in China, said that Washington's threat of tariffs appeared to have been "somewhat effective" thus far.
"I don't think it is only a tactic, personally," Zarit told reporters on Wednesday, adding that the group does not view tariffs as the best way of addressing the trade frictions.
"The thinking became that, if the US doesn't have any leverage and there is no pressure on our Chinese friends, then we will not have serious negotiations," he added.
The Global Times, an influential tabloid run by the ruling Communist Party's official People's Daily, wrote that the United States was suffering from a 'delusion' and warned that the 'trade renege could leave Washington dancing with itself'.
State news agency Xinhua said that China hoped that the United States would not act impulsively, but stood ready to fight to protect its own interests.
"China will continue to hold pragmatic consultations with the United States' delegation and hope that the United States will act in accordance with the spirit of the joint statement," according to Xinhua.
Visa Changes
Also on Tuesday, a White House official said that the US government plans to shorten the length of visas issued to some Chinese citizens, as part of a strategy to prevent intellectual-property theft by US rivals.
Citing a document issued by the Trump administration in December, the official said that the US government would consider restrictions on visas for science and technology students from some countries.
News by Reuters, edited by ESM. Click subscribe to sign up to ESM: European Supermarket Magazine.
