The failure to strike a deal in the tariffs war with the US is “just a small setback”, according to China’s leading trade envoy.
Trade talks have been taking place for a few days but ended on Friday without a deal as the US increased tariffs on $200bn (£153bn) of Chinese goods from 10% to 25%.
Britain has urged both sides to step back in the dispute, warning that an all-out trade war would have dire consequences for both the UK and global economy.
Chinese vice-premier Liu He said negotiations would continue and he remained cautiously optimistic.
But he insisted that a deal would require Donald Trump’s administration to agree to end the punitive tariffs it has imposed on billions of dollars’ worth of Chinese goods.
Mr Liu said the remaining differences were crucial ones “and we will make no concessions on matters of principle”.
He said he did not believe the negotiations had broken down.
Mr Liu told Hong Kong’s Phoenix TV: “On the contrary, I think it is just a small setback in the talks between two countries, which is inevitable.”
He said it was “China’s opinion that the tariffs are the starting point of the trade friction and must be totally lifted if a deal is reached”.
Robert Lighthizer, a US trade representative, said preparations were being made to expand the tariffs to cover $300bn (£230bn) of Chinese products that are not already taxed – virtually everything imported from China.
The two sides disagreed over the amount of goods China would pledge to purchase from the US to help reduce the American trade deficit, according to Mr Liu.
He said: “We think this is a very serious issue and we cannot easily change our minds.”
Chancellor Philip Hammond also remains optimistic a resolution will be hammered out.
He said: “We have already seen a negative effect of forecasts for global growth largely caused by trade tensions between China and the US, so this is a worry.
“A full-blown trade war would have a very serious dampening effect on the whole global economy, including the UK, but I think we are a way away from that yet and I hope that this will be resolved.”
He added: “I am optimistic that in the end there will be a trade deal between China and the US.
“That is very important for us in the UK because our economy is a very open economy so it is very exposed to what is happening elsewhere in the world.”
Source: SKY NEWS