'Won't capitulate': China warns as Trump threatens new tariffs

China rejects US accusation of backtracking in talks as Trump raises stakes with plans to increase tariffs on Friday.

    Trump's comments triggered a round of selling in Asian and European markets [Johannes Eisele/AFP]
    Trump's comments triggered a round of selling in Asian and European markets [Johannes Eisele/AFP]

    China has rejected accusations made by the United States of backtracking in trade talks and warned it would not "capitulate to any pressure" as the two sides head into make-or-break negotiations.

    "The US has assigned a lot of labels, such as backtracking, going back on one's word, and so on. Lots of promises have been foisted on China," Chinese commerce ministry spokesman Gao Feng told reporters in Beijing on Thursday.

    "China will not capitulate to any pressure, and we have the determination and ability to defend our own interests," Gao said, warning that it "has already prepared for all possible situations".

    The US has raised the stakes with plans to increase tariffs on $200bn in Chinese goods from 10 to 25 percent at 12:01am (04:01GMT) on Friday, prompting Beijing to vow to hit back with "necessary countermeasures".

    Gao's comments came as a Chinese delegation led by Vice Premier Liu He was set to hold talks in Washington on Thursday and Friday.

    The talks are aimed at salvaging the trade deal that appeared to be unravelling after US President Donald Trump accused China of breaking it and promised to impose more tariffs if no agreement is reached.

    'They broke the deal'

    At a rally in Florida on Wednesday, Trump said Beijing would pay if no agreement is reached.

    190507024341003

    "I just announced that we'll increase tariffs on China and we won't back down until China stops cheating our workers and stealing our jobs, and that's what's going to happen, otherwise we don't have to do business with them," Trump told a cheering crowd.

    "They broke the deal," he added. "They can't do that. So they'll be paying. If we don't make the deal, nothing wrong with taking in more than $100bn a year."

    Al Jazeera's Adrian Brown said there was now a "grim" realisation in Beijing that more US tariffs on Chinese goods are inevitable.

    "There is so little time left for Chinese negotiators to avoid the tariffs, now talks do resume in Washington on Thursday but they are due to last just two days - just two days to try to achieve a deal that can somehow prevent this trade dispute from escalating," he said from Beijing.

    "There could be a possible surprise but I think it's more likely that there is unlikely to be a deal in the short term, I think the question is will the two sides continue negotiating, if they do, it will be enough to stabilise markets."

    Trump's comments triggered a round of selling in Asian and European markets.

    Trade negotiations are a long process and it is normal to have disagreements, Gao said, adding that China is willing to continue talks with the US to resolve the trade dispute.

    190501050010910

    While the US wants to reduce the scale of its trade deficit with China, it is also seeking better protection for American intellectual property and more market access in China for US companies.

    Gao described accusations about Chinese firms stealing tech secrets as unreasonable and said they were not based on facts.

    A tit-for-tat tariff war

    The world's two largest economies have been embroiled in a tit-for-tat tariff war since July 2018 over US demands that the Asian powerhouse adopt policy changes that would, among other things, better protect American intellectual property and make China's market more accessible to US companies.

    Expectations were recently riding high that a deal could be reached, but a deep rift over the language of the proposed agreement opened up last weekend.

    Pompeo urges NATO allies to adapt to new China, Russia threats

    Reuters news agency, citing US government and private-sector sources, reported on Wednesday that China had backtracked on almost all aspects of a draft trade agreement, threatening to blow up the negotiations and prompting Trump to order the tariff increase.

    Washington is demanding Beijing make sweeping changes to its trade and regulatory practices, including protecting US intellectual property from theft and forced transfers to Chinese firms, curbs on Chinese government subsidies and increased American access to China's markets.

    Trump also has sought massive hikes in Chinese purchases of US farm, energy and manufactured products to shrink a gaping US trade deficit with China.

    SOURCE: News agencies