Donald Tusk. Picture: REUTERS
Donald Tusk. Picture: REUTERS

Beijing — The EU on Monday urged the US, China and Russia to work together to ease worsening global trade tension, warning that they could otherwise spiral into "conflict and chaos".

The comments from EU Council president Donald Tusk come as Washington and Beijing stand on the brink of a trade war which many fear could hammer the global economy, while the US has also picked fights with allies in Europe and Canada.

"It is the common duty of Europe and China, but also America and Russia, not to destroy [the global trade order] but to improve it, not to start trade wars, which turned into hot conflicts so often in our history," Tusk said in Beijing.

"There is still time to prevent conflict and chaos."

Tusk spoke at an annual EU-China summit held on Monday against the backdrop of the deepening trade discord.

The EU — the world’s biggest single market with 28 countries and 500-million people — is trying to buttress alliances in the face of protectionism unleashed by US President Donald Trump’s "America First" administration.

The meeting between Chinese and European officials in Beijing, which also included European Commission head Jean-Claude Juncker, came as Trump prepared to hold talks in Helsinki with Russian leader Vladimir Putin. Trump fuelled the rising rancour in an interview aired on Sunday in which he labelled the EU, Russia and China as "foes" of the US.

Tusk said the world needs trade reform, not confrontation.

"This is why I am calling on our Chinese hosts, but also on presidents Trump and Putin, to jointly start this process from a thorough reform of the WTO [World Trade Organisation]," Tusk said.

"Today we are facing a dilemma: whether to play a tough game, such as tariff wars and conflict in places like Ukraine and Syria, or to look for common solutions based on fair rules," Tusk said.

In a meeting later with Chinese President Xi Jinping, Juncker said "multilateralism is under attack, an attack unprecedented since the end of World War II. We cannot accept that through unilateral attacks the multilateral system should be damaged," he said, stressing the need for WTO reform.

French President Emmanuel Macron called in late May for talks on overhauling the WTO as European companies were bracing for punishing US tariffs on steel and aluminium imports, which ultimately went into effect on June 1.

Besides the steel and aluminium tariffs on US trading partners, in July Trump implemented tariffs on $34bn worth of Chinese imports, drawing a tit-for-tat response from Beijing.

Washington last week threatened more measures on another $200bn in Chinese goods. Beijing has said it would retaliate, and on Monday the commerce ministry said it had added the $200bn tariff threat to existing WTO complaints it has lodged against Washington.

The back and forth has heightened fears that trading powers will hunker down into a destructive all-out trade war that could hit global growth.

China said on Monday its economic growth rate had slowed slightly to 6.7% in the second quarter of 2018, from 6.8% the previous quarter.

"The China-US trade friction unilaterally provoked by the United States will have an impact on the Chinese and US economies," said Mao Shengyong, a spokesman for the national statistics bureau.

"Now that the world economy is deeply integrated, industrial chains have become globalised, and many related countries also will feel an impact."