"This Is A Red Line": Beijing Warns Trump Trade Deal Is Off If US Imposes Tariffs

In a scathing editorial warning Trump to back off on his latest tariff threat, on Sunday China said that any trade deals between the US and China, and any progress and commitments made so far in bilateral negotiations would be withdrawn if President Donald Trump follows through with this threat.

"If the U.S. rolls out trade measures including tariffs, all the agreements reached in the negotiations won’t take effect," the state-run Xinhua News Agency reported this morning, citing a statement from the Chinese team that met with a U.S. delegation led by Commerce Secretary Wilbur Ross, which arrived in China overnight.

US trade delegation led by Commerce Secretary Wilbur Ross is in China to discuss bilateral trade relations, June 2-3

Separately, China has continued to express growing frustration with the tactics deployed by the White House, and an editorial in the nationalist, state-run tabloid Global Times said that "the U.S. can’t have its cake and eat it too," adding that the U.S. "needs to choose between tariffs and exporting more to China."

China's anger is the result of Trump’s revival of the simmering trade war between the two superpowers after Trump last week unveiled a plan to slap tariffs on $50 billion of Chinese imports, casting into doubt ongoing trade discussion about how to reduce China’s $375 billion goods-trade surplus with the U.S.

As Bloomberg clarifies, the Xinhua report came out on Sunday after Ross met with Chinese Vice Premier Liu He for talks that Ross called “friendly and frank, and covered some useful topics about specific export items.” At the same time as negotiators focus on technical steps to reduce the U.S. deficit, Trump’s aggressive reversals have rattled Beijing as it raises concerns about the possibility that any agreement made could be simply torn up by the president.

“China is concerned over the U.S.’s unpredictability, especially after Trump turned an about-face on tariffs,” said Gai Xinzhe, an analyst at Bank of China’s finance institute in Beijing. “Trump needs to give out more goodwill in exchange for really productive negotiations. Bluff, threat, and willful moves might work in business bargaining, but they could backfire in talks among nations.”

Meanwhile, suggesting that all the progress achieved over the past two months in trade negotiations would be lost if Trump follows though with tariffs, a commentary by state-run China Radio International said that the government’s stance on canceling any agreements reached in the talks if Trump’s tariffs go into effect was a "red line."

Meanwhile, the negotiations continue. According to Bloomberg, the Ross-led U.S. delegation, which was in Beijing for two days, included energy and agriculture experts, reflecting the U.S. desire to increase exports of natural gas and food.

On the Chinese side, officials including Commerce Minister Zhong Shan, Central Bank Governor Yi Gang, Vice Agricultural Minister Han Jun, and Li Fanrong, vice minister of national energy administration, accompanied Liu in the talks, according to a media pool report.

During his visit, Ross has been looking to build on a vague joint statement released May 19, after negotiations in Washington. China pledged then to take steps to “substantially” reduce the U.S. trade deficit, including by buying more American farm goods and energy, though it didn’t commit to a dollar amount. However it now appears there was again no formal conclusion or announcement of "success" following this latest 2-day blitz.

Ross, meanwhile, finds himself torn, and under pressure from U.S. lawmakers to stay tough on Chinese telecom-equipment maker ZTE Corp even as Trump has said he is willing to forego sanctions against the company in exchange for a large fine and management changes, as well as China's greenlighting the NXP-Qualcomm deal. Republican Senator Marco Rubio and other lawmakers from both parties have questioned Trump’s leniency toward ZTE, arguing the company represents a security risk.

As Bloomberg adds, the stakes remain high for the global economy, and any collapse in trade talks could lead to a sharp slowdown in the global economy which is "cruising at its fastest pace of growth in seven years." But the International Monetary Fund has warned that a trade war could threaten the recovery, and policy makers are contending with a growing list of geopolitical risks, from a political crisis in Italy to the rocky progress of peace talks with North Korea.

The best summary of recent negotiations, however, comes from Goldman's chief economist Jan Hatzius who overnight writes that "less than two weeks after Trump Administration officials declared that the “trade war is on hold,” policy has shifted substantially. Following trade announcements over the last few days, the trade war does not appear to be “on hold” but simply "on."

Comments

Glass Steagall JibjeResearch Sun, 06/03/2018 - 10:49 Permalink

Wonder if China knows that they are sitting in front of a Rothschild agent ? <wink>

https://en.m.wikipedia.org/wiki/Wilbur_Ross

Same Rothschild agent that bailed out the orange joo in the late 80's. Same agent that donated heavily to the orange joo's presidential campaign. Oh, and what a coincidence - is now our Commerce Secretary. What a shit show. This country is fucked.

In reply to by JibjeResearch

Escrava Isaura JibjeResearch Sun, 06/03/2018 - 11:18 Permalink

Trade war is so stupid, then, when done with the largest growing market, it’s harder to know where to start. But here’s one example:

China’s box-office grosses beat the U.S. for the first time in the first quarter of 2018. At least two recent releases, including ‘Avengers: Infinity War,” above, have collected more than $200 million in China.

 

In reply to by JibjeResearch

Escrava Isaura Justin Case Sun, 06/03/2018 - 11:40 Permalink

Trump reminds me Gorbachev.

Gorbachev tried to open up believing it would keep the republics.

Then came the Coup D’état and Ukraine vote to leave the republic

Trump is closing the nation.

Now we will face trade war and stagflation.

Either Trump will become a great President or total failure.

I have no idea of which outcome, but Trump is sure taking a big and unnecessary risk.

 

In reply to by Justin Case

Glass Steagall Yellow_Snow Sun, 06/03/2018 - 11:45 Permalink

The question suggests that he is in some way in charge. He is not. He was installed to do the bidding of his Rothschild banking handlers and to continue the divide (and conquer) of the American people. MAGA? Where's the wall? Still waiting for Mexico to cut the check, I suppose. When are the troops coming home? When are the manufacturing jobs coming home again? God I miss Obamacare. Oh shit, nothing changed there either. And for fuck sake, don't give me that, would it be better under Hillary nonsense. If voting made any difference, they wouldn't let us do it.

In reply to by Yellow_Snow

Mazzy Pendolino Sun, 06/03/2018 - 12:24 Permalink

The fact that other countries are FINALLY getting upset over the renegotiation of trade deals means that Trump is actually negotiating deals that are at least fair, if not favorable, to the US.  The fact that other countries are getting squeamish means that the one-sided bullshit is coming to an end.  This is the first time in my three decades that I've ever heard of other countries getting upset over our trade deals with them.

In reply to by Pendolino

Lordflin Sun, 06/03/2018 - 10:15 Permalink

Shooting war will start within the next year or so, I suspect... would love to be wrong on this... trade negotiations won't matter much at that point.

 

Lordflin farflungstar Sun, 06/03/2018 - 10:55 Permalink

You are correct, infighting between elites here typically takes the form of public disgrace, trumped up charges (whether real or imagined, I say trumped up as the purpose is not justice but rather agenda) and assassination... assassination is used by the Chinese too, but since Ji Ping can simply throw anyone he desires into prison more usually what passes as a justice system there is the preferred route (and I am in no wise suggesting we have a more pure form of justice here, just different).

In reply to by farflungstar