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The US-China Trade War Will Intensify

China Commits to Trade Talks Amid `Groundless' Huawei Suspicions

May 24, 2019
“We will do whatever’s necessary to protect the legitimate interests of our companies, of our people and of our country,” said China's ambassador to the U.S., Cui Tiankai.

Beijing is committed to striking a trade deal with the U.S. but it’s ready to respond with more countermeasures, said China’s Ambassador to the U.S. Cui Tiankai, as he called the blacklisting of Huawei an “unusual” act of state power against a company.

Cui said in an interview with Bloomberg TV Friday that China wants to continue working toward a trade agreement for President Donald Trump and Chinese President Xi Jinping to finalize. There’s no official discussions about a meeting between the two leaders, he said.

The U.S. and China should have cooperation and collaboration, Cui said, adding that “trade is about mutual benefits, war is about mutual destruction. How can you put these two very different concepts in one term?”

Trade talks between Beijing and Washington stalled this month as Trump accused China of backing out of a deal that the U.S. said was almost completed. In response, Trump hiked the tariff rate on $200 billion in Chinese imports. The U.S. also released a list of about $300 billion in Chinese goods that could face additional tariffs, including clothing, toys and mobile phones. If Trump follows through on that threat, U.S. levies imposed since last year would cover essentially all imports from the Asian nation.

There are signs the trade conflict is spilling over into other areas, especially technology. The Trump administration last week placed Huawei Technologies Co. on an export blacklist, choking off China’s biggest technology company from its U.S. suppliers. Cui said the accusations against Huawei are a “groundless suspicion.”

He described the action by the U.S. against Huawei as an “unusual” move that mobilizes “state power against a private company.”

Asked about Chinese retaliation to the U.S.’s Huawei moves, he said “we will do whatever’s necessary to protect the legitimate interests of our companies, of our people and of our country.”

“If things are moving in the wrong direction, then you could see a response very soon,” he said about the timetable for a Huawei response. “But if we could work together to push in the right direction, then things will get better of course.”

At the heart of Trump’s crackdown is the suspicion that Chinese firms help Beijing spy on foreign governments. Huawei’s chief financial officer, Meng Wanzhou, was arrested in Canada last year, and the U.S. is seeking her extradition on charges she helped the company defraud banks by concealing business dealings with Iran in violation of U.S. sanctions. She denies the charges.

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“What are people really up to under the pretext of national security? We don’t know,” said Cui on Friday. “Can they really stop the technological progress? Can they really deprive people of the right to benefit from the technologies? I don’t think so. And do they really have the interests of the American people in mind? I don’t think so either.”

Trump said Thursday that Huawei could “be included in some kind of trade deal” with China, without offering any details. The president also added that the company is “very dangerous.”

The U.S. is also considering putting at least five Chinese surveillance-equipment companies on the same blacklist as Huawei. In another move that could target China, the Commerce Department said Thursday that it was considering a rule to put anti-subsidy tariffs on products from countries that undervalue their currencies.

China’s tone has become more belligerent since the U.S. escalated the trade war.

"All of the Chinese people are ready to embark on a new ‘Long March’ journey with greater courage and resilience and will never yield to foreign bullying and assault," state-run Xinhua News Agency said in a commentary on Friday. The U.S. "continues to attack Chinese companies not because they have done anything wrong, but because they are too outstanding for the United States to accept."

“We still believe that talks, communication, consultations on equal footing is the only way out for any dispute between us and we are still committed to that,” Cui said on Friday. “We are ready to deal with the current administration and President Trump.”

“So far there’s no official discussion about a possible meeting between the two presidents,” he said when asked about the potential for a meeting between Xi and Trump next month at a G-20 meeting in Osaka, Japan. “But the possibility is always open.”

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Licensed content from Bloomberg, copyright 2016.

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