MercoPress. South Atlantic News Agency

China says three issues lie in the way of a trade agreement with the US

Liu said the disagreements were over matters of principle. “Every country has its principles, and we cannot give in.”

Three issues lie in the way of an agreement between China and the United States, which will have to be ironed out in upcoming talks in Beijing, said China’s chief trade negotiator as the US moved to impose higher tariffs on Chinese goods.

Spelling out for the first time what these conflicts were, Vice-Premier Liu He maintained that negotiations have not broken down, even though his meeting with US Treasury Secretary Steven Mnuchin and US

Trade Representative Robert Lighthizer ended just after 90 minutes.

In an interview after talks wrapped up on Friday, Mr Liu told Chinese media in Washington that while there was consensus reached over many issues, the two sides still could not see eye to eye over these: Beijing’s demand for the US to remove all additional tariffs; the target set by the US on goods purchased by China; and the wording of the agreement’s text.

Chinese purchases of US goods should be matched by real demand, said Mr Liu, while China seeks an agreement that is “equal and dignified”.

He said the disagreements were over matters of principle. “Every country has its principles, and we cannot give in.” Mr Liu also said China strongly opposes the US raising tariffs, which does not help resolve the dispute and compels China to retaliate.

“As a country, if the US increases tariffs, we must react. We hope they will act with restraint, and so will we. Don’t keep escalating it.”

China has yet to launch counter-measures despite vowing it would after the US more than doubled levies on US$200 billion of Chinese goods from 10% to 25% on Friday.

Mr Trump said he has started preparing another round of tariffs that will place 25% of duties on another US$325 billion of Chinese products. China last year retaliated with tariffs on US$110 billion worth of American goods.

Mr Liu on Friday that the two sides are still committed to talking and will meet in Beijing next, although he did not give a date.

“Negotiations have not broken down, but rather on the contrary, this is only a normal kink in negotiations between the two countries; it is inevitable,” he said, adding that he remains optimistic about resolving their trade skirmish.

The talks in Washington had involved the two sides clarifying their positions, setting the agenda for the next round of talks and committing to communicating better with each other, he said.

The vice-premier also drew attention during the interview to the Chinese economy, saying it has improved from last year even as the country continues to reform to make itself more competitive.

“There’s still room to manoeuvre within our financial and monetary policies, and our businesses are confident. Even though there are pressures, the economy will continue its path of stable and healthy growth,” he said.

“It’s a good thing for a big country to suffer some setbacks in the course of its development. These stumbling blocks is a good challenge of our capabilities.”

The ruling Communist Party’s official People’s Daily said on Saturday that Beijing “will never yield to the United States side’s maximum pressure and will not compromise on matters of principle”.

A commentary by China’s official news agency Xinhua also on Saturday appealed to the US not to make “unilateralist moves” that will harm the global interests, pointing to the upheaval in the markets after President Trump announced last week he was raising tariffs on China.

“Any dialogue in which a party coerces the other with the aim of achieving a one-sided result would only derail the consultations,” it said.