China urges US to make "wise choice" ahead of tariffs decision

[BEIJING] China urged the United States on Thursday to make a "wise decision" on trade, saying it was ready to respond in case Washington chose confrontation, as US President Donald prepares to decide whether to activate tariffs on Chinese goods.

Mr Trump is due to unveil revisions to his initial tariff list targeting US$50 billion of Chinese goods on Friday. People familiar with the revisions said the list would be slightly smaller than the original, with some goods deleted and others added, particularly in the technology sector.

Another administration official said a draft document showed the new list would still be close to US$50 billion, with about 1,300 product categories, but both the dollar amount and quantity of products were still subject to change.

Speaking to reporters in Beijing, with US Secretary of State Mike Pompeo at his side, the Chinese government's top diplomat, State Councillor Wang Yi, said there were two choices when it came to the trade issue.

"The first choice is cooperation and mutual benefit. The other choice is confrontation and mutual loss. China chooses the first," Mr Wang said. "We hope the US side can also make the same wise choice. Of course, we have also made preparations to respond to the second kind of choice."

The move toward activating US tariffs on Chinese goods follows negotiations between US and Chinese officials centred on increased purchases by Beijing of American farm and energy commodities and cutting the US trade deficit with China.

Commerce Secretary Wilbur Ross this month met Chinese officials in Beijing and brought back a Chinese proposal to buy around US$70 billion worth of additional commodities and manufactured goods. But that offer has not been accepted by Mr  Trump, people familiar with the matter said.

Mr Wang said a basic consensus reached by the two countries during the recent talks was a pact to use "constructive means" to handle disagreements.

"We hope the US side can meet China halfway and earnestly implement this important consensus, and promote the appropriate resolution of the relevant issue through a win-win and not lose-lose manner," he said.

"In this process, we hope the U.S. side does not unilaterally take any non-constructive actions, and does not create new obstacles for the next phase of consultations."

Mr Pompeo said the US deficit with China was still too high, but that they had had good talks.

"I stressed how important it is for President Trump to rectify that situation so that trade becomes more balanced, more reciprocal and more fair, with the opportunity to have American workers be treated fairly. We had good and constructive discussions."

Mr Pompeo struck a warm tone with Chinese President Xi Jinping, at a meeting later in the evening, including wishing him a happy birthday for Friday - eliciting a chuckle and a "thank you" from Mr Xi.

"President Trump asked me to send his regards. I have watched your interactions. He truly values the relationship personally between the two of you and the relationship between our two countries," Mr Pompeo said.

It remains unclear when Mr Trump would activate the tariffs, if he decides to do so. Several industry lobbyists told Reuters they expected the move to come as early as Friday, with publication of a Federal Register notice, or it could be put off until next week.

If Washington adopts tariffs, Beijing is expected to hit back with its own duties on US imports, including soybeans, cars, chemicals and planes, according to a list it released in early April.

Under the 1974 trade law that Mr Trump invoked to pursue a tariff investigation into China's intellectual property practices, he could delay the activation by 30 days. He can also delay the tariffs by another 180 days if the US Trade Representative's office finds negotiations with China are yielding progress.

REUTERS