Trade War | The American Sentinel Newsletter

China has pulled the plug on a US warship’s scheduled visit to Hong Kong, and scrapped plans for a top admiral to meet with his US counterpart in Washington, officials said Tuesday.

The moves come as trade tensions soar between Beijing and Washington, which this week enacted new tariffs against China covering another $200 billion of its imports.

The USS Wasp, an amphibious assault ship, was due to visit Hong Kong next month. Lieutenant Colonel David Eastburn, a Pentagon spokesman, said the Chinese had scrapped the visit.

“Thes Chinese government did not approve a request for a US port visit to Hong Kong by the USS Wasp,” Eastburn said.

“We have a long track record of successful port visits to Hong Kong, and we expect that will continue.”

China’s decision comes after Beijing recalled a top admiral who was visiting the US.

A US defense official told AFP that Vice Admiral Shen Jinlong, who commands the People’s Liberation Army Navy, attended a naval symposium in Rhode Island last week.

Following the event, he was planning a visit to Washington that would have included meetings at the Pentagon with his US counterpart, Chief of Naval Operations Admiral John Richardson.

“We were informed that Vice Admiral Shen Jinlong has been recalled to China and won’t conduct a visit with Admiral Richardson,” Eastburn said.

Last week, Washington placed financial sanctions on the Equipment Development Department of the Chinese Defense Ministry, and its top administrator, for its recent purchase of Russian Sukhoi Su-35 fighter jets and S-400 surface-to-air missile systems.

Beijing responded by summoning the US ambassador to China, Terry Branstad, to lodge an official protest, while the Chinese military expressed “strong indignation and resolute opposition” to the sanctions.

United in their resentment of America’s global influence, China and Russia have sought in recent years to tighten up their ties and this month conducted weeklong joint military drills in Moscow’s largest ever war games.

Further inflaming tensions, the US State Department said Monday it was set to approve a $330 million sale of military aviation parts to the self-governing island of Taiwan.

Beijing sees Taiwan as part of its territory awaiting unification, and is deeply suspicious of the island’s relations with the US.

China expressed “strong dissatisfaction” on Tuesday over the planned sale and urged Washington scrap the contract.

Beijing has been incensed by recent warming ties between Washington and Taipei, including the State Department’s approval of a preliminary license to sell submarine technology to the island.

Seeing it from a foreign perspective.

China’s surplus with the United States hit a record last month, data showed Friday, adding to brewing tensions between the economic superpowers as they stand on the brink of an all-out trade war that Beijing warned would have a “negative impact” globally.

The figures come after the two sides exchanged tit-for-tat tariffs on billions of dollars worth of goods and President Donald Trump threatened to up the ante with measures on a further $200 billion of Chinese imports.

Beijing said China’s surplus with the US hit an all-time high $28.97 billion last month, while exports to the country hit a record $42.62 billion.

Over the first six months of the year the surplus climbed to $133.8 billion, up 13.8 percent from last year, as total two-way trade continued to expand despite the face-off.

The imbalance is at the heart of Trump’s anger at what he describes as Beijing’s unfair trade practices that are hurting American companies and destroying jobs.

But in a statement from its commerce ministry Thursday, China blamed those problems on the USA, saying the imbalance was “overestimated” and caused by America’s own “domestic structural problems”.

China’s overall surplus continued to shrink, falling 24.5 percent on-year for the first six months, the data showed, with customs saying it has shrunk for the past eight quarters.

Last Friday, Trump rolled out 25 percent tariffs on $34 billion of Chinese goods, prompting Beijing to accuse Washington of launching the “largest trade war” in economic history and immediately match the US tariffs dollar for dollar.

“This trade dispute will definitely have an impact on China-US trade and will have a very negative impact on global trade,” said customs administration spokesman Huang Songping at a briefing Friday.

— A spiralling battle —

China’s commerce ministry has said the two sides are not discussing restarting trade negotiations, and renewed its pledge to “strike back” against Washington’s latest threat to slap $200 billion of Chinese imports with new 10 percent taxes.

The threat hammered global markets, especially as fears mount that Trump’s decision to pick fights with other key allies such as Canada and the European Union could fuel an all-out global trade war.

The spiralling battle with Beijing shows no signs of cooling down, and observers warn the impact will begin to hurt soon as China’s economy struggles with slowing growth — and just as leaders try to battle a worryingly large debt mountain.

“Looking ahead, export growth will cool in the coming months as US tariffs start to bite alongside a broader softening in global demand,” said Julian Evans-Pritchard of Capital Economics.

Beijing will back away from its war on debt and roll out policy easing measures, predicted China economist at Nomura investment bank Ting Lu, as it faces potential trade war fallout and a domestic slowdown proving to be worse than expected.

“We expect (economic) growth to slow noticeably” in the second half of the year, he said in a research note.

China’s total exports rose 11.3 percent year-on-year in June, beating a Bloomberg News forecast of 9.5 percent, while imports increased 14.1 percent, below the forecast 21.3 percent.

— Disrupting trade —

China’s June export upswing may have been caused by exporters shipping their goods early to beat the scheduled tariffs, analysts say, with the trade fight expected to further impact such data in coming months.

Beijing has instructed companies to look for imports beyond the US, and this week an official at China’s largest grain trader said it hoped to diversify away from US soybeans to those grown in South America and Eastern Europe.

The US has “no respect for rules of international law and international order,” said assistant foreign minister Zhang Jun on Friday, adding that China would step up cooperation with other developing nations like the BRICS grouping.

“This is the way for us to respond to the challenges of unilateralism and trade protectionism,” said Zhang.