China sends trade war warning as Donald Trump's tariff deadline looms

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China sends trade war warning as Donald Trump's tariff deadline looms

Blame China and those who are breaking trade rules, not Donald Trump, White House economic adviser Larry Kudlow said as China warned that all commitments so far in talks with the USA over trade will be withdrawn if the president carries out his threat to impose tariffs.

The Chinese news agency Xinhua said the talks between Ross and Liu had made "positive and concrete progress", and had discussed agriculture and energy.

United States commerce secretary Wilbur Ross said at the start of the meeting with China's top economic official, vice premier Liu He, that they would discuss specific American exports China might buy.

White House statements last week that it plans to impose tariffs on $50 billion in Chinese goods and other penalties clouded the talks, causing Chinese officials to dig in their heels, according to people with knowledge of the discussions from both sides.

The two governments released no schedule for the talks, but China said earlier that Ross was to be in Beijing through Monday.

Washington wants Beijing to narrow its trade surplus.

China and the United States left the thorniest issues untouched during their latest round of trade talks with the White House's internal divisions hampering the chances of reaching a deal, business insiders and observers have said.

Trump's tariff threat targeting technology goods reflects American alarm about China's status as a potential competitor in profitable fields from solar power to electric cars to biotechnology. China pledged to take steps to "substantially" reduce the USA trade deficit, including by buying more American farm goods and energy, though it didn't commit to a dollar amount.

The purchases are meant to reduce America's trade deficit in goods and services with China, which previous year came to $337 billion, according to the U.S. Commerce Department.

Earlier, Mnuchin had pointed to a rocky road ahead for the U.S., which is now embroiled in trade disputes on two fronts, after talking about Washington's China policy.

If the United States imposes the tariffs, China has previously said, Beijing would retaliate by blocking an equal value of soybeans and other goods from the United States.

Last week, the Trump administration then announced it would roll out duties on Chinese imports worth $50 billion, mainly from the technology sector.

Ross and Liu held a working dinner Saturday ahead of their talks.

"It has been a tense and tough G7 - I would say it's been far more a G6 plus one than a G7", said Le Maire, who called the tariffs unjustified.

But even as Beijing has maintained it will not back down, it has announced conciliatory measures like lowering tariffs on auto and consumer good imports to address some of the Trump Administration's concerns.

On Friday, the U.S. imposed 25 per cent tariffs on steel imports and 10 per cent tariffs on aluminium from its allies, including European nations and Canada, triggering protests from G7 finance ministers.

China wanted the United States to meet it half way, Xinhua said. He also pushed back against the argument that Canadian steel poses a USA security threat.

After a lull in tensions following China's May 19 pledge, the White House renewed its threat last week.

China was also ruffled by the imposition of tariffs on steel and aluminum.

"Where China does not budge is in areas it considers to be its fundamental development strategy", said Louis Kuijs of Oxford Economics, a former World Bank economist in Beijing.

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