China warns 'all trade deals are off' if US raises tariffs
China has threatened to withdraw from its previously agreed commitments with Washington to cut its bilateral trade deficit on goods with the US if President Donald Trump moves ahead with tariffs on $50bn-worth of Chinese products.
After the latest round of trade negotiations between the US delegation, led by Commerce Secretary Wilbur Ross, and China over the weekend, Beijing said "positive and concrete progress" had been made, saying there was "good communication" between both sides on agriculture and energy, while relevant details were yet to be confirmed by both sides, Xinhua reported.
"The achievements reached by China and the United States should be based on the premise that the two sides should meet each other halfway and not fight a trade war," Xinhua said, citing a statement from China's trade delegation.
However, Beijing warned that any agreements would not take effect "if the US side imposes any trade sanctions including raising tariffs".
"China is willing to increase imports from other countries, including the United States, to satisfy the Chinese people's increasing consumption needs and the country's high-quality economic growth. Economic reform and opening up, as well as increasing domestic consumption, are China's national strategies -- and our established pace of reform won't change," Beijing added.
Jasper Lawler, head of research at London Capital Group, said: "Risk remains firmly on the table despite the breakdown of US – Chinese trade talks. Markets remain surprisingly sanguine despite trade war fears ramping up."
"Trade tariffs had already been confirmed against the EU, Mexico and Canada prior to the weekend. The third round of US – Chinese trade talks breaking down over the weekend indicate that a $100bn trade war between the two powers could begin as soon as this month."
"Yet the markets are reacting with the same indifference with which they responded to the tariffs being levied on the US's closest allies last week, in a sign that traders are becoming increasingly accustomed to Trump’s heavy-handed negotiating tactics."
The US was also facing push-back from Canada and the European Union, after the White House decided on 1 June not to extend a waiver from tariffs on imports of aluminium and steel imports from those two allies.
Speaking in an interview aired on Fox News, Canadian Prime Minister Justin Trudeau had said "We're going to be polite, but we're not going to be pushed around."
Trudeau last week said the US move amounted to an "attack on our industry" and that Ottawa would respond "dollar for dollar".
That prompted a response from White House economic adviser Larry Kudlow, who told Fox: "To say that this is an attack on Canada is not right [...]
"I don't think our tariffs are anything to do with our friendship and longstanding alliance with Canada. This is a trade dispute, if you will. It can be resolved, if people work together."
US Defence Secretary, James Mattis, reportedly also came under significant pressure to ease the trade stance at a security summit held in Singapore over the weekend.