US slams harmful China trade policies, threatens auto tariffs

[WASHINGTON] US Trade Representative Robert Lighthizer on Wednesday slammed Beijing for failing to offer "meaningful reform" on aggressive trade policies that harm US workers and industry, and threatened tariffs on Chinese autos.

The latest trade threat against China comes days before President Donald Trump is due to meet with Chinese leader Xi Jinping at a G-20 summit in Argentina to defuse the ongoing trade conflict between the world's top two economic powers.

Instead, Mr Lighthizer's statement escalated the dispute further, saying: "China's aggressive, state-directed industrial policies are causing severe harm to US workers and manufacturers."

And while talks continue, "As of yet, China has not come to the table with proposals for meaningful reform," he said.

The country's policies on auto tariffs are "especially egregious," taxing US cars at more than double the rate it charges other countries.

"At the president's direction, I will examine all available tools to equalize the tariffs applied to automobiles," he said.

Mr Trump already has imposed steep punitive tariffs on about half of the Chinese goods imported into the US market each year, and has threatened to target the remaining US$267 billion as well - which would hit Apple iPhones and laptops produced in China.

Earlier this month, Mr Xi and Mr Trump discussed the US-China trade conflict during a phone conversation that Trump called "very good."

Mr Xi said he was "very happy" to talk to Mr Trump again.

TOUGH CONDITIONS

But tensions came to the fore again at a summit when Mr Xi and US Vice-President Mike Pence delivered competing speeches criticizing each other's trade and investment practices.

Mr Xi lashed out at "America First" trade protectionism, while Mr Pence warned smaller countries not to be seduced by China's massive Belt and Road infrastructure programme.

Mr Trump heads to Buenos Aires on Thursday for a Group of 20 summit that is confronted with increasingly dire warnings, by the International Monetary Fund among others, of the potential harm faced by the world economy from the president's trade wars.

Mr Trump is due to meet Mr Xi for a working dinner at the summit that runs Friday and Saturday.

Economic advisor Larry Kudlow told a White House press conference that "the president said there is a good possibility that we can make a deal and he is open to it."

Despite Mr Kudlow's repeated insistence that Mr Trump sees cause for optimism, he also underlined the tough conditions that the administration wants to impose on Beijing.

"China should change its practices and come into the community of responsible trading nations," Mr Kudlow said, stressing that he considers the US economy in far better shape than China's to weather a prolonged trade war.

"We are in a position to deal with it and handle it very well," he said.

China will have to give way on "fairness and reciprocity," he said, warning that US concerns over intellectual property theft and China's forced technology transfers "must be solved."

AFP