China issues warning to US following fruitless trade talks

Talks between the US and China aimed at resolving trade tensions have failed to make significant progress, making a global trade war increasingly likely.

US Commerce Secretary Wilbur Ross was in Beijing this weekend for a third round of trade negotiations, but talks with Chinese Vice Premier Liu He appear to have proven fruitless, prompting the Financial Times to describe the parties as ‘on track’ for a ‘$100bn trade war.’

There was no joint statement issued following the talks, which could indicate the extent to which relations are strained. Chinese state media outlet Xinhua published a brief statement from the Beijing side, referring to progress made in previous talks. But the statement also carried a warning, saying that ‘all economic and trade outcomes of the talks will not take effect if the US side imposes any trade sanctions including raising tariffs.’

Reuters reports that there were no statements or comment provided from the US delegation, which has resulted in global media focusing on China’s stark warning to the White House. Ross departed for Washington on Sunday evening.

The situation is now perilously close to a fully blown trade war, with China making it clear that any tariffs levelled against it will result in a complete reversal of previous progress, which included a deal to reduce its trade surplus with the US.

President Trump proved last week that he is willing to proceed with tariffs, hitting key allies in NAFTA and the EU with steel duties. That fact will do little to alleviate concerns within the global trading system.