China: US must drop tariffs for trade deal
Beijing issues warning to Washington even as trade talks continue
BEIJING: Existing US tariffs will have to be removed if there is to be a trade deal between Beijing and Washington, China's Commerce Ministry said yesterday.
The leaders of the two countries agreed last weekend to relaunch trade talks that had stalled in May.
Trade teams from both countries are in contact, Chinese Commerce Ministry spokesman Gao Feng told a media briefing.
To get talks restarted, US President Donald Trump had agreed not to put tariffs on about US$300 billion (S$407 billion) in additional Chinese imports and ease curbs on Chinese tech giant Huawei.
The US now has tariffs of 25 per cent on US$250 billion of Chinese goods.
China welcomes the US decision not to slap new tariffs, Mr Gao said, when asked how long the trade truce can last.
The US trade deficit jumped in May and trade tensions between the two countries helped drive activity in the services sector to a two-year low last month. The economy's dimming outlook was underscored by other data on Wednesday showing private employers adding far fewer than expected jobs to their payrolls last month.
New orders for manufactured goods dropped in May for a second straight month.
The reports followed recent weak housing and business investment data, as well as moderate consumer spending. Business and consumer confidence have dipped. The slowdown in activity as last year's stimulus from tax cuts and more government spending fades could prompt the US Federal Reserve to cut rates this month.
"One wonders how long Washington will continue to claim they are helping the US economy," said Mr Chris Rupkey, chief economist at MUFG in New York. "One of the factors behind the economy's fall in the Great Depression was protectionism and trade wars, and it will be a miracle if the world economy can avoid another downturn this time." - REUTERS