China warns United States trade deals are off if tariffs go ahead

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Ross gave no details at the start of his meeting with China's top economic official, Vice Premier Liu He, at the Diaoyutai State Guesthouse.

Analysts had noted in recent weeks a seesawing of United States demands of China, that may reflect division among Trump's inner circle on whether reducing the trade deficit, demanding structural change to China's economy or addressing forced technology transfers was the priority. Last month, they held talks in Washington and put out a joint statement.

The Chinese news agency Xinhua said the talks between Ross and Liu had made "positive and concrete progress", and had discussed agriculture and energy.

"Chinese officials know these talks are precarious, but may underestimate the domestic political cost Trump now sees in lifting the ZTE ban without major concessions from China", said Andrew Gilholm, the director of China analysis at Control Risks, a political and security consulting firm.

"If the United States introduces trade sanctions including a tariff increase, all the economic and trade achievements negotiated by the two parties will not take effect", the Chinese government said in a statement to Xinhua state news agency Sunday, The Associated Press reported.

China, it said, was willing to increase its quota of imports as it was part of the country's national strategy.

China also said it won't be pushed into making major changes to its economic policies.

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But Beijing warned all the results were premised on "not fighting a trade war".

"All economic and trade outcomes of the talks will not take effect if the USA side imposes any trade sanctions including raising tariffs", a statement from China's official Xinhua News Agency said. The US and China have threatened each other with $US150 billion in tariffs.

He said Washington would use its move on Tuesday to slap punitive tariffs on Chinese imports as a bargaining chip.

There was no immediate response from the United States delegation or from Ross himself.

Washington's negotiating stance in the trade talks with Beijing has shifted as Trump's team of hardliners and more mainstream advisors compete to push their views.

The U.S. delegation didn't comment after the talks but Ross earler said that the "meetings so far have been friendly and frank, and covered some useful topics about specific export items".

Wilbur Ross sounded upbeat on Sunday after having dinner the previous evening with China's Vice-Premier Liu He.

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Tensions temporarily eased on May 19 after China promised to "significantly increase" its purchases of USA farm, energy and other products.

But US Treasury Secretary Steven Mnuchin denied that the US had abandoned leadership in the global economy and said he had passed on the other countries' strong feelings to Mr Trump.

The looming tariff hikes have also raised hackles among USA trade partners in Canada, Mexico and the European Union, stoking fears that a full-scale trade war could erupt within days.

Mnuchin had said on Saturday the United States wanted China to agree to structural change to its economy.

More than 50 US officials are in Beijing for the trade talks. Germany is also hoping its steel exports to the USA will be exempted from sanctions.

On Saturday, Trump weighed in on the trade situation with other countries.

That might alienate allies who share complaints about Chinese technology policy and a flood of low-cost steel, aluminium and other exports they say are the result of improper subsidies and hurt foreign competitors.

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