US commerce secretary Wilbur Ross downplayed the likelihood of resolving the dispute at the G20 summit. Picture: ANDREW HARRER/BLOOMBERG
US commerce secretary Wilbur Ross downplayed the likelihood of resolving the dispute at the G20 summit. Picture: ANDREW HARRER/BLOOMBERG

Washington/Beijing — US President Donald Trump on Tuesday defended the use of tariffs as part of his trade strategy, while China vowed a tough response if the US insists on escalating trade tensions amid ongoing negotiations.

“Tariffs are a great negotiating tool,” Trump tweeted, one day after saying he was ready to impose another round of punitive tariffs on China if conditions were not met.

On Monday, the Republican president said he would raise tariffs on Chinese imports further if he cannot make progress in trade talks with Chinese President Xi Jinping at the Group of 20 (G20) summit later in June.

Trump has repeatedly said he is getting ready to meet Xi at the summit in Osaka, Japan, at the end of June, but China has not confirmed it.

Chinese foreign ministry spokesperson Geng Shuang would not be drawn into confirming a Xi-Trump meeting at the G20, saying information would be released once it was available to the foreign ministry.

“China does not want to fight a trade war, but we are not afraid of fighting a trade war,” he said, adding that China’s door was open to talks based on equality. “If the US only wants to escalate trade frictions, we will resolutely respond and fight to the end.”

Last week, Trump said he would decide after the G20 meeting of the leaders of the world’s largest economies whether to carry out a threat to impose tariffs on an additional $300bn in Chinese goods.

Trump is buoyed by his self-declared victory following a days-long battle with Mexico after he threatened to impose tariffs unless Mexican authorities did more to stem the migrant flow to their shared border.

The two fights have pitted the Trump administration against its top two trading partners.

Tensions between Washington and Beijing flared in May after the Trump administration accused China of reneging on promises to make structural economic changes during months of trade talks.

The US is seeking sweeping changes, including an end to forced technology transfers and theft of US trade secrets. It also wants curbs on subsidies for Chinese state-owned enterprises and better access for US firms to Chinese markets.

On May 10, Trump raised tariffs on $200bn of Chinese goods to 25% and took steps to levy duties on an additional $300bn in Chinese imports. Beijing retaliated with tariff hikes on a revised list of $60bn in US goods.

US commerce secretary Wilbur Ross on Tuesday downplayed the likelihood of resolving the dispute at the G20 summit, saying it would not be “a place where anyone makes a definitive deal”.

“At the G-20, at most it will be ... some sort of agreement on a path forward, but certainly it’s not going to be a definite agreement,” Ross told CNBC.

Terry Branstad, the US ambassador to China, was scheduled to meet with US Vice-President Mike Pence in Washington late on Tuesday amid the ongoing negotiations.

The US government has also angered China by putting Huawei, the world’s biggest telecoms equipment maker, on a blacklist that effectively bans US companies from doing business with the Chinese firm.

Investors worry China will retaliate by putting US companies on a blacklist or banning exports to the US of rare earth metals, which are used in products such as memory chips, rechargeable batteries and cellphones.