China appealed to the United States today to meet it halfway to salvage a deal that could end their trade war.
China's chief negotiator is in Washington for two days of talks hoping to stave off US tariff hikes set to be triggered tomorrow.
The two sides had appeared to be converging on a deal until last weekend, when US President Donald Trump announced his intention to raise tariffs with his negotiators saying that China was backtracking on earlier commitments.
"The US side has given many labels recently, 'backtracking', 'betraying' etc. China sets great store on trustworthiness and keeps its promises, and this has never changed," Commerce Ministry spokesman Gao Feng said today.
Gao told reporters in Beijing that it was normal for both sides to have disagreements during the negotiating process.
Trump told supporters at a rally in Florida last night that China "broke the deal", and vowed not to back down on imposing new tariffs on Chinese imports unless Beijing "stops cheating our workers".
A protracted trade war between the world's two largest economies would damage global economic growth, and investors pulled their money out of stock markets this week amid fears of the prospective agreement unravelling.
Gao said the decision to send the delegation led by Vice Premier Liu He to Washington despite the tariff threat demonstrated China's "utmost sincerity".
"We hope the US can meet China halfway, take care of each others' concerns, and resolve existing problems through cooperation and consultations," he said.
Gao urged the US to avoid unilateral action, while warning China was fully prepared to defend its interests.
"China's attitude has been consistent and China will not succumb to any pressure. China has made preparations to respond to all kinds of possible outcomes." He did not elaborate.
US government and private sector sources previously told Reuters that a draft trade agreement was riddled with reversals by China that undermined core US demands.
World stock markets drop amid tensions on US-China trade talks pic.twitter.com/YHcJkEa4ED— RTÉ Business (@RTEbusiness) May 9, 2019
In each of the seven chapters of the draft, China had deleted its commitments to change laws to resolve core complaints that caused the US to launch a trade war - theft of US intellectual property and trade secrets; forced technology transfers; competition policy; access to financial services and currency manipulation.
The stripping of binding legal language from the draft struck directly at the highest priority of US Trade Representative Robert Lighthizer.
He views changes to Chinese laws as essential to verifying compliance after years of what US officials have called empty reform promises.
Lighthizer's office said tariffs on $200 billion of Chinese goods would rise to 25% from 10% on Friday morning, during the discussions in Washington.
The tariffs would target chemicals, building materials, furniture and some consumer electronics among other goods.
Trump also threatened on Sunday to levy tariffs on an additional $325 billion of China's goods, on top of the $250 billion of its products already hit by import taxes.
Since July last year, China has cumulatively imposed countertariffs of up to 25% on about $110 billion of US products.
It last levied tariffs, of 5% to 10%, on $60 billion of US goods including liquefied natural gas and small aircraft in September.
Based on 2018 US Census Bureau trade data, China would only have about $10 billion in US imports left to levy in retaliation for any future US tariffs, including crude oil and large aircraft.
While the US wants to reduce the scale of its trade deficit with China, it is also seeking stronger protection for American intellectual property and more market access in China for US companies.
Gao described accusations about Chinese firms stealing tech secrets as unreasonable and said they were not based on facts.