Going it alone: USA alienates allies before taking on Beijing

Posted June 03, 2018

China's Commerce Ministry on Thursday criticized proposed U.S. investment controls as a violation of global trade rules, saying it reserves the right to retaliate if they take effect.

Treasury Secretary Steven Mnuchin said then the conflict was "on hold" after Beijing promised to buy more us goods to help narrow its multibillion-dollar trade surplus with the United States.

The White House statement came a day after it renewed its threat to place 25 per cent tariffs on United States dollars 50 billion in Chinese goods in retaliation of the latter's unfair trade practices. The list will include $50 billion of imports that will face a 25 percent tariff.

Mr Trump had issued a statement on Tuesday threatening further tariffs on Chinese goods and contending that China's average tariff on imports was more than three times as high as that of in the United States, an assertion supported by World Trade Organisation data.

Before the easing of tensions, China had responded in turn to each USA action it perceived as escalating the trade disputes with a measure of its own.

The statement was released following the conclusion of talks between US Commerce Secretary Wilbur Ross and Chinese Vice Premier Liu He.

In December, China cut import taxes on nearly 200 consumer products including food, health supplements, pharmaceuticals, garments, and recreational goods to 7.7 percent, on average, from 17.3 percent, according to the finance ministry.

"The thinking became that if the USA doesn't have any leverage and there is no pressure on our Chinese friends, then we will not have serious negotiations", Zarit added.

Trade analysts say the Trump team should be enlisting its allies to present a united front to China.

US President Donald Trump is concerned about China's unfair trade practices and striving to stop Beijing from such practices and theft of American intellectual property, the White House said on May 31.

Recent months have also seen Trump pull out of the Iran nuclear deal, open a United States embassy in Jerusalem, leave the Paris climate pact and lambast North Atlantic Treaty Organisation allies for not paying their way.

Digital savant Omar Gallaga of the Austin American-Statesman's 512 Tech says ZTE isn't a major player in the USA phone market, though it is a large company that has stolen US technology.

First announced in March, the tariff threat drew an in-kind response from China - primarily targeting agricultural goods, including soybeans, corn, wheat, sorghum, cotton and beef.

That followed an announcement from the State Council, or the country's Cabinet, on Wednesday that China will cut import tariffs on consumer items including apparel, cosmetics, home appliances, and drugs. That would be on top of a $1 billion penalty ZTE paid for selling high-tech equipment to North Korea and Iran in violation of US sanctions. In return, the U.S. Commerce Department will lift a seven-year ban on ZTE buying components from U.S. companies.

Meanwhile, China said it was both "surprised and unsurprised" by the move.