China Warns Countries Against Striking Trade Deals with US

Beijing has warned it will retaliate against countries that negotiate trade deals with the US “at the expense of China’s interests”, fuelling global tensions as the world’s two economic superpowers face off over tariffs.

The statement by the commerce ministry, which was responding to reports that US President Donald Trump’s administration planned to use trade talks with multiple countries to try to isolate China, called on them to instead join Beijing to “resist unilateral bullying”.

“China firmly opposes any party reaching a deal at the expense of China’s interests,” the ministry said on Monday. “If this happens, China will never accept it and will resolutely take countermeasures in a reciprocal manner.”

China has become the focus of Trump’s trade war after the US president paused a wave of unilateral “reciprocal” tariffs on most countries but left levies on Chinese goods as high as 145 per cent in place. Beijing has retaliated, imposing its own tariffs of 125 per cent on US goods.

Trump has called several times for Beijing to open negotiations to avert a trade war, and China has said it is open to talks, but neither side has signalled that high-level contacts are under way.

The Wall Street Journal reported last week that Trump’s administration wanted to use talks on reciprocal tariffs with more than 70 countries to push for help isolating Beijing in exchange for reductions in US levies and trade barriers.

While the report said the US strategy is intended to pressure Beijing to come to the negotiating table and abandon its defiant stance, China has shown little sign of backing down.

China’s leader Xi Jinping visited Vietnam, Malaysia and Cambodia last week, where he sought to shore up relations with Beijing’s trading partners.

South-east Asian exporters face steep tariffs under the Trump administration, which has also accused them of serving as a transshipment conduit for Chinese goods.

China has sought to portray itself as a pillar of the international trading system. But it is struggling with weak domestic demand following a deep property slowdown, forcing policymakers to lean on manufacturing and exports for economic growth and leaving the economy vulnerable to the trade war with the US.

Beijing has promised various initiatives to spur consumption but has held back from launching a “bazooka” fiscal stimulus, instead investing heavily in industry to shake off its reliance on western technology.

“China respects the right of all parties to resolve their economic and trade differences with the United States through equal consultations,” the commerce ministry said.

But if countries encroached on Beijing’s interests, it was “determined and capable of safeguarding its own rights”.

The ministry added that said “all parties should stand on the side of fairness and justice and should defend international economic and trade rules and the multilateral trading system”.

“Once international trade returns to the ‘law of the jungle’ where the strong prey on the weak, all countries will become victims,” the ministry said.