BEIJING -- U.S. Commerce Secretary Wilbur Ross arrived in Beijing on Saturday for talks on China's promise to buy more American goods after Washington revived tensions by renewing its threat of tariff increases on Chinese high-tech exports.
The talks focus on adding details to China's May 19 promise to narrow its politically volatile surplus in trade in goods with the United States, which reached a record $375.2 billion last year.
President Donald Trump threw the status of the talks into doubt last week by renewing a threat to raise tariffs on $50 billion of Chinese goods over complaints that Beijing steals or pressures foreign companies to hand over technology.
The president took to Twitter on Saturday to defend his aggressive trade policies. "The United States must, at long last, be treated fairly on Trade," Trump tweeted. "If we charge a country ZERO to sell their goods, and they charge us 25, 50 or even 100 percent to sell ours, it is UNFAIR and can no longer be tolerated. That is not Free or Fair Trade, it is Stupid Trade!"
Private sector analysts say that while Beijing is willing to compromise on its trade surplus, it will resist changes that might threaten plans to transform China into a global technology competitor.
The two governments released no schedule for the talks, but China said earlier that Ross was to be in Beijing through Monday.
Reporters saw Ross outside his hotel at midday Saturday, but he didn't respond to their questions before he got into a car and was driven away. Ross was to have a dinner meeting Saturday evening with Vice Premier Liu He at the Diaoyutai State Guesthouse in Beijing.
Ross was scheduled to meet with Liu again today.
China has promised to "significantly increase" purchases of farm goods, energy, and other products and services. Still, Beijing resisted pressure to commit to a specific target of narrowing its annual surplus with the United States by $200 billion.
After Beijing's announcement, U.S. Treasury Secretary Steven Mnuchin said the dispute was "on hold." But the truce appeared to end with last week's announcement that Washington was going ahead with tariff increases on technology goods and would impose curbs on Chinese investment and purchases of U.S. high-tech exports.
The move reflects growing American concern about China's status as a potential tech competitor and complaints that Beijing improperly subsidizes its fledgling industries and shields them from competition.
Foreign governments and businesses cite strategic plans such as "Made in China 2025," which calls for state-led efforts to create Chinese industry leaders in areas from robots to electric cars to computer chips.
"The U.S. focus on so-called industrially significant technologies heightens the risk of escalation between the two countries," BMI Research said in a report. "Indeed, while China has shown itself willing to compromise in the area of trade deficit reduction, it will not take any actions which threaten its strategically important 'Made in China 2025' program."
Trump also has threatened to raise tariffs on an additional $100 billion of Chinese goods, but he gave no indication last week on whether that would go ahead.
Earlier, China responded with a threat to retaliate with higher duties on a $50 billion list of American goods including soybeans, small aircraft, whiskey, electric vehicles and orange juice. It criticized Trump's move and said it reserved the right to retaliate but avoided repeating its earlier threat.
The trade dispute began in March, when the president threatened to slap tariffs on up to $50 billion in Chinese imports to punish Beijing for abusing American intellectual-property rights. By June 15, the administration plans to publish a final list of products to which the duties will apply, with them taking effect "shortly thereafter."
The tariff threat may enhance Ross' leverage as he sits down in Beijing with his Chinese counterparts. But he will also be under pressure from U.S. lawmakers to stay tough on Chinese telecom-equipment maker ZTE Corp. Last month, Trump said he would allow ZTE to stay in business once it pays a $1.3 billion fine, shakes up its management, and provides "high-level security guarantees."
China pressed the U.S. to give ZTE a break after the Commerce Department cut off the company from U.S. suppliers to punish it for allegedly lying to American officials in a sanctions case. Republican Sen. Marco Rubio and other lawmakers from both parties have questioned Trump's leniency toward ZTE, arguing that the company represents a security risk.
GROUP OF SEVEN RILED
In Canada, Mnuchin faced much criticism last week from his Group of Seven counterparts over the the Trump administration's decision Thursday to go ahead with tariffs on steel and aluminum imports from Canada, Europe and Mexico, citing national security concerns. Japanese Finance Minister Taro Aso said he almost "felt sorry" for the U.S. finance chief.
"He's not directly in charge of the metal tariffs, so in that sense it was very tough for him," Aso told reporters after the second day of G-7 finance minister meetings in Whistler, British Columbia. "I felt sorry for him, but I guess it's not the sort of issue I should sympathize with."
The G-7 officials expressed frustration over how the U.S. is alienating its historical trading partners with new tariffs on steel. They cautioned that Americans are losing sight of the real challenges faced by the global economy, even as they held out hope for a change of heart.
Canada and the European Union have said they will take immediate steps to retaliate.
"We will be divided -- it will not be a G-7, it will be a G-6 plus one," French Finance Minister Bruno Le Maire said in a Bloomberg Television interview at the meeting in a ski resort near Vancouver. "It is dangerous for growth, dangerous for the economic development of the world, and dangerous for our jobs in the EU."
The trade disputes are hijacking a summit that was initially seen as an opportunity to tout the successes of the global economic upswing, and they are testing the resiliency of economic ties among Western nations.
G-7 finance chiefs issued a rare rebuke of a member nation, saying U.S. trade actions could undermine global economic confidence and threaten the effectiveness of the Western alliance.
The statement singled out the U.S., the largest and most important member of the G-7, saying "decisive action" is needed at a leaders summit this week in Quebec. The ministers requested that Mnuchin "communicate their unanimous concern and disappointment."
"The international community is faced with significant economic and security issues, which are best addressed through a united front from G-7 countries," Canadian Finance Minister Bill Morneau said in a "chair's summary" of the meeting in Whistler. "Members continue to make progress on behalf of our citizens, but recognize that this collaboration and cooperation has been put at risk by trade actions against other members."
Morneau said he'll "clearly" express to Mnuchin his displeasure with the protectionist measures.
German Finance Minister Olaf Scholz said the U.S. levies on imported metals are probably illegal.
"The decision by the U.S. government to unilaterally implement tariffs is wrong, and -- from my point of view -- also illegal," Scholz told reporters. "We have clear rules, which are determined at the international level, and this is a breach of those rules."
Before last week's trade actions, the EU and Canada had previously been granted temporary exemptions. Japan had already been subject to the tariffs, which the U.S. said were necessary to protect its national security.
At his closing news conference, Mnuchin said he's already conveyed the G-7 message to Trump, who he said "has been very clear in wanting to address trade issues."
"Our objective is to make sure we have fair and balanced trade," Mnuchin said in the Canadian ski resort town. "I don't think in any way the U.S. is abandoning its leadership in the global economy. Quite the contrary, we've had a massive effort in tax reform in the United States, which has had an incredible impact on the U.S. economy."
Frictions in Whistler this weekend could foreshadow even more drama at a G-7 leaders' summit this week, which Trump will attend.
"We won't negotiate under pressure. We will never accept to negotiate under pressure," said Le Maire, adding that the EU should be granted an exemption to the metal tariffs.
The security designation used by Trump to justify the tariffs has been particularly grating to the Europeans and Canadians.
"We're obviously all very disappointed as close allies and partners of the U.S. that they have taken this step, especially as they've taken it on national security grounds," U.K. Chancellor of the Exchequer Philip Hammond said in a separate interview with BNN Bloomberg Television. He said the leaders' summit may offer an opportunity to resolve the dispute.
"We know that President Trump's way of doing business is very personal and the fact that he is going to have direct interactions with the leaders of the countries most affected by these measures gives us hope," Hammond said.
Information for this article was contributed by Joe McDonald and Paul Wiseman of The Associated Press; and by Andrew Mayeda, Yuko Takeo, Jenny Leonard and Jana Randow of Bloomberg News.
A Section on 06/03/2018