The United States has accused China of continuing – and even stepping up – unfair trade practices that led to Washington imposing punitive tariffs on its goods, signalling that the fundamental dispute between the two remains far from resolved ahead of a highly anticipated meeting between their leaders next week at the Group of 20 (G-20) summit in Argentina.
“This update shows that China has not fundamentally altered its unfair, unreasonable and market-distorting practices that were the subject of the March 2018 report on our Section 301 investigation,” US trade chief Robert Lighthizer said in a statement on Tuesday accompanying his office’s follow-up to the report earlier this year on China’s trade practices.
The unexpected and highly critical update was issued with just over a week to go before President Donald Trump meets his Chinese counterpart Xi Jinping. Many see the meeting as a chance for the two leaders to agree on a truce in their trade war before Jan 1 – when US tariffs on Chinese goods are set to rise to 25 per cent.
Tuesday’s update underscores the Trump administration’s belief that the course correction it is seeking from China has not materialised.
But, in contrast to America’s hardline stance, the response in Beijing to the update was muted, and it downplayed the differences between the two sides.
When asked about the latest US move, Foreign Ministry spokesman Geng Shuang told reporters at a regular press briefing: “It is normal to have trade frictions, but what is key is to conduct dialogue and consultation based on mutual respect, equality and honesty.”
The 53-page update released in Washington said China had not done enough to address America’s concerns over its trade practices, adding that Beijing had even made clear – both in public statements and in government-to-government communications – that it would not change its policies despite the initial rounds of punitive tariffs in July and August.
“Indeed, China largely denied there were problems with respect to its policies involving technology transfer and intellectual property,” said the update.
Both sides have publicly dug in their heels in recent days, particularly during the Asia-Pacific Economic Cooperation summit in Papua New Guinea at the weekend.
US Vice-President Mike Pence, who attended the summit in place of Mr Trump, raised the stakes with a warning that America could more than double its tariffs on US$250 billion (S$344 billion) worth of Chinese goods, and vowing that the US “will not change course until China changes its ways”.
Mr Xi, for his part, denounced protectionist actions as short-sighted, and said that they were doomed to failure. Warning against escalating the conflict, he said: “History has shown that confrontation, whether in the form of a cold war, a hot war or a trade war, produces no winners.”
Chinese experts have read the US update as an attempt by Washington to exert pressure on Beijing ahead of the G-20 meeting, and said the tough stance means it is unlikely that Mr Trump and Mr Xi would reach a broad agreement next week.
Earlier, on Tuesday, White House National Economic Council director Larry Kudlow told Fox Business News that Mr Trump has stressed that “any deal between the two countries has got to be in American interests”. “(Any deal) has to have, frankly, more than we have seen so far,” he said.
But Mr Kudlow also said that Mr Trump was “taking an optimistic view”, adding that very detailed communications were occurring at all levels of government ahead of the G-20 summit in Buenos Aires beginning on Nov 30.