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US-China trade war: All stories

China expands trade with France to bolster European ties amid tariff clash with Donald Trump

China pledges to buy more Airbus jetliners and farm products from France and to work on lowering barriers to its markets

PUBLISHED : Tuesday, 26 June, 2018, 4:37am
UPDATED : Tuesday, 26 June, 2018, 7:09am

China told France on Monday that it would buy more of its farm produce, hinted at future Airbus purchases and pledged to work on market access, shoring up its trade ties with Europe amid the increasing danger of a tariff war with the United States.

China’s premier, Li Keqiang, told French Prime Minister Edouard Philippe that Beijing was planning to buy more planes this year and was ready for further talks with France on obtaining Airbus aircraft.

China seeking jetliners as French PM prepares to head to Beijing

Paris and the European planemaker have been working to salvage a deal since President Emmanuel Macron returned from Beijing empty-handed in January.

Industry sources say a blunder by diplomats and some of Macron’s own comments, revealing details of aeroplane negotiations with top officials, upset the Chinese.

“I explained to Mr Prime Minister that in recent years we have bought quite a lot of passenger aircraft, and there needs to be a period to digest this,” Li told a joint news conference. “In spite of this, we are still willing to strengthen cooperation with France’s Airbus.”

China has struck a very different tone with the US, having warned that Boeing, which is based in Chicago, Illinois, could become a casualty if the world’s two largest economies fail to halt their slide toward a trade war.

US pushing China on beef, biotech in trade row talks, official reveals

Both China and the European Union are locked in their own trade disputes with the US, and China has been seeking common ground with the EU in opposing what Beijing sees as US protectionism.

“We believe that relevant frictions and disputes can be resolved via talks. There are no winners from fighting a trade war,” Li said. “All sides should join together to expand growth and not engage in putting up trade barriers or protectionism. This is good for nobody.”

Later this week, the Trump administration is expected to unveil new measures to curb Chinese companies buying stakes in US firms in another twist to the spiralling trade conflict.

The US Treasury Department is drafting restrictions that would block firms with at least 25 per cent Chinese ownership from buying US companies with “industrially significant technology”, a government official briefed on the matter said on Sunday.

US Treasury Secretary Steven Mnuchin on Monday reacted to those reports, saying that the policy was aimed at every country that the US might consider a threat, not just China.

BIS tells central banks to keep lifting rates but warns of trade war threat

Washington has complained that China is misappropriating US technology through joint venture rules and other policies, and it has already announced tariffs on US$34 billion worth of Chinese goods, the first of a potential total of US$450 billion, as a result. The new tariffs are due to take effect on July 6.

During his visit to China in January, Macron said a contract with Beijing for 184 Airbus A320 narrow-body jets would be finalised soon.

Li’s remarks appeared to strengthen the chance of more business for Airbus, although no deal was signed on Monday, as China usually reserves awarding such big prizes to visits by top foreign leaders.

China on Monday also signed an agreement to import beef from France, just as US beef shipments are threatened with tariffs. Last year, China signalled the end of an embargo on French beef that was first imposed after the mad cow disease crisis in Europe more than two decades ago.

Li also said China would buy more farm products, without elaborating.

China, EU plan working group to revamp WTO and counter US unilateralism

Hosting talks on a bilateral investment agreement with the EU on Monday, Vice-Premier Liu He said China and the EU had a common interest in defending the global multilateral trading system.

“Both sides believe that we must resolutely oppose unilateralism and trade protectionism and prevent such behaviour from causing volatility and recession in the global economy,” Liu told a media briefing after the talks.

Both China and the EU have already announced retaliatory measures against punitive US tariffs.

China will impose additional 25 per cent tariffs on 659 US goods worth US$50 billion in response to the US announcement that it will levy tariffs on Chinese imports.

Tariffs on US$34 billion of US goods including agricultural products such as soybeans will take effect from July 6, the Chinese commerce ministry said. Soybeans are China’s biggest import from the US by value.

The EU last week imposed tariffs on a range of US goods in response to import duties on EU steel and aluminium by the US administration.

A top EU official, however, made it clear that Europe is not fully on the same page as China.

The EU and China discussed “difficult issues” such as state subsidies, forced tech transfers, and cybersecurity during the talks, the EU Commission’s vice-president, Jyrki Katainen, told a news conference in Beijing.

Katainen said China and the EU needed to tackle overcapacity in sectors such as steel and aluminium, specifically identifying industries Trump first targeted when he launched a tariff war.