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Exclusive: China seeks trade firewall with U.S. allies in rush of ambassador meetings - sources

Reuters  |  BEIJING/BRUSSELS 

By and Robin Emmott

BEIJING/(Reuters) - China's held a series of meetings with the from major European nations last week to ask them to stand together with against U.S. protectionism, according to four sources familiar with the discussions.

Some of the western diplomats involved in the meetings with Fu Ziying, who is also a vice-commerce minister, have viewed the approaches as a sign of how anxious is getting about the expanding conflict with Washington, the sources said.

U.S. has threatened to impose tariffs on $150 billion in Chinese imports to the U.S. to punish for what officials regard as its predatory industrial policies and abuse of U.S. intellectual property. has vowed to retaliate.

Amid the rapidly rising tensions between the two sides, has sought to seize the moral high ground as a defender of the multilateral trade system, even as U.S. allies express shared concern with over Beijing's highly restricted market.

The rush of meetings last Thursday and Friday with from France, Germany, the United Kingdom, Spain, Italy, and the European Union, may be a signal that is trying to build a against Trump's aggressive trade measures, the severity of which some foreign diplomats said had miscalculated.

The individual meetings, which were called by Fu, were generally "non-confrontational" as sought support in countering the United States, a European with knowledge of the discussions told There were, though, some "subliminal threats" about consequences for foreign companies, this person said.

"The message was that we have to stand together against U.S. protectionism in favour of free trade," the said.

"is showing confidence, but internally they appear quite concerned. They have apparently underestimated Trump's resolve on trade," the said, adding that is nervous about China's major trading partners siding with

Three other diplomatic sources, and three embassies, confirmed that the meetings occurred.

An said its met with Fu on April 12, and that while the U.S.-trade dispute was discussed, the meeting was mostly about bilateral issues.

A also confirmed that its met with Fu last week as part of regular discussions with the ministry that touched on "bilateral and multilateral trade issues".

An EU Delegation said its attended a meeting with Fu, but did not elaborate.

A declined to comment, and the other embassies did not respond immediately to requests for comment.

also did not respond to a request for comment.

"SMACKS OF DESPERATION"

The Chinese government's top Wang Yi, during a visit to on Monday, urged to work together with to oppose protectionism, though foreign officials say that is not naive enough to think that it could fully drive a wedge between and its allies.

One senior EU in who confirmed the meetings said the EU was not in the business of taking sides, and that its goal was to get the multilateral process back on track, referring to efforts to resolve trade disputes through the WTO.

"I think it also smacks of desperation because also knows that the is not going to confront its biggest ally," the EU said of the meetings.

"has been very effective at making the most of the free-trading rule book. I don't think anyone in the West is going to leave it to to set new ones," the said.

Trade policy for members of the EU is handled by the European Commission, not by individual member states.

Another in Beijing, who was speaking on condition of anonymity, said China's outreach to European countries had begun even before Trump announced 25 percent tariffs on $50 billion in Chinese industrial technology, transport and medical products in early April.

When responded within hours with its intention to levy similar duties on $50 billion worth of U.S. soybeans, planes, cars, beef and chemicals, Trump then escalated the dispute by instructing his administration to identify another $100 billion worth of Chinese goods to penalise.

None of these threatened duties have yet gone into effect.

U.S. business groups argue that Trump should form a coalition with the EU, and other western nations to push to open its economy. They say that these countries share Washington's consternation over Chinese market restrictions and its policies to produce national champion companies in key industries at the expense of foreign competitors.

However, instead of reaching out to its European allies, has alienated them with its protectionist moves, including its targeting of European countries with tariffs on and aluminium exports to the U.S.

The EU has said the and aluminium tariffs are unjustified and is seeking compensation from the at the

(Reporting by Michael Martina, Tony Munroe, and in BEIJING, and Robin in BRUSSELS; Editing by Martin Howell)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, April 17 2018. 19:05 IST
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