China hits back at US President Trump's trade threats ahead of vital summit with Xi Jinping

Jasper Jolly
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U.S. President Barack Obama Visits China
Donald Trump has abandoned the overtures former President Barack Obama (left) made to Xi Jinping (right) (Source: Getty)

China’s government has hit back at American plans to review its trade policies ahead of a crunch trade summit this week between President Xi Jinping and US President Donald Trump.

The ministry of commerce said the US should only act “in accordance with international rules”, according to Xinhua news agency, a mouthpiece for the Chinese state.

The statement also emphasised the “mutual benefits” of Sino-American trade, in pointed contrast to the rhetoric employed by Trump.

Read more: China's President Xi Xinping claims to be free trade champion again

Xi will meet Trump at his Florida Mar-a-Lago resort, starting on Thursday, with the US’s massive trade deficit with China a central focus of talks.

Trump previously said the meeting would be a "difficult one", before signing an executive order on Friday ordering a review of all countries running a trade surplus with the US.

While not explicitly naming China, he said: “The jobs and wealth have been stripped from our country year after year, decade after decade, trade deficit after trade deficit.”

The review will be carried out by commerce secretary Wilbur Ross, who said it will mark a “totally new chapter in America’s trade relationships”.

Read more: Political divides call into question just how much Trump will actually do

The US trade deficit with China ran to $31.3bn (£25bn) in January, according to the US Census Bureau. Imports from China have outstripped exports in every month since 1986.

Trump’s team argue China has exploited the US by encouraging exports, to the detriment of products manufactured in American factories. Lower-skilled manufacturing jobs have been “stolen”, Trump contends, by countries with cheaper currencies and lower wages.

The President has tried to move attention on to trade after his priority healthcare bill collapsed in the face of opposition from his own Republican party. That failure has led some to question whether he can push through his more radical plans to reorient the US economy away from international free trade.

Trump has floated punitive tariffs on Chinese imports, as well as a more ambitious overhaul of the entire US tax policy which would heavily penalise all imports in an effort to “reshore” manufacturing jobs.

Read more: Why are UK stock markets falling now? A guide to the Trump trade

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