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China warns US trade deals are off if tariffs go ahead

The US has threatened to impose tariffs on Chinese products in a dispute over Beijing’s aggressive tactics to challenge US technological dominance.

China will not step up its purchases of US products if President Donald Trump goes ahead with his threat to tax billions of dollars’ worth of Chinese imports, the country said on Sunday.

White House advisers have insisted on fundamental changes in ties between the world’s two biggest economic powers.

China’s warning came after delegations led by US commerce secretary Wilbur Ross and China’s top economic official, vice premier Liu He, wrapped up a meeting on Beijing’s pledge to narrow its trade surplus.

Ross said at the start of the event they had discussed specific American exports China might purchase, but the talks ended with no joint statement and neither side released details.

“Both sides appear to have hardened their negotiating stances and are waiting for the other side to blink,” said Eswar Prasad, professor of trade policy at Cornell University.

“Despite the potential negative repercussions for both economies, the risk of a full-blown China-US trade war, with tariffs and other trade sanctions being imposed by both sides, has risen significantly.”

Peter Navarro, director of the White House National Trade Council, was asked on Fox’s Sunday Morning Futures if the US was willing to throw away its relationship with China by proceeding with threatened tariff hikes.

He pointed in part to an unfair relationship involving a multi-billion dollar trade deficit, Defence Secretary Jim Mattis’ warning of China’s activities in the South China Sea and the threat of China stealing US intellectual property.

“That’s a relationship with China that structurally has to change,” he said.

“We would love to have a peaceful, friendly relationship with China. But we’re also standing firm that the president is the leader on this.”

The United States has threatened to impose tariffs on up to 50 billion dollars (£37 billion) of Chinese products in a dispute over Beijing’s aggressive tactics to challenge US technological dominance.

Trump has asked US trade representative Robert Lighthizer to look for another 100 billion dollars in Chinese products to tax.

China has targeted 50 billion dollars in US products in retaliation.

“If the United States introduces trade sanctions including a tariff increase, all the economic and trade achievements negotiated by the two parties will not take effect,” said a Chinese government statement, carried by the official Xinhua News Agency.

The negotiating process should be “based on the premise” of not fighting a “trade war,” the statement said.

The dispute with China comes at the same time Trump has riled some of America’s closest allies with the imposition of tariffs on steel and aluminium imports.

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