China says it will fight back if U.S. escalates trade spat

By Se Young Lee and Yawen Chen

BEIJING (Reuters) - China's commerce ministry said on Thursday trade negotiations with the United States would be impossible as Washington's attempts at dialogue were not sincere, and vowed to retaliate should U.S. President Donald Trump escalate current tensions.

China President Xi Jinping on Tuesday vowed to open China's economy further and lower import duties on goods such as cars, which had boosted hopes for a compromise. Trump responded in a tweet saying he was "thankful" for Xi's remarks on tariffs and access for U.S. automakers, and said both countries would "make great progress together".

Commerce Ministry spokesman Gao Feng told reporters during a regular briefing, however, that Xi's remarks had nothing to do with the trade row and should not be mischaracterised as a concession to Washington.

"I hope some people in the U.S do not misjudge the situation," he said. "If the United States takes any action to escalate the situation, China will not hesitate to fight back."

The world's two largest economies have threatened each other with tens of billions of dollars' worth of tariffs in recent weeks, leading to worries that Washington and Beijing may engage in a full-scale trade war that could damage global growth and roil markets.

Some U.S. officials and analysts have said they believe the dispute could eventually be resolved via dialogue, but Beijing reiterated on Thursday that no formal talks have taken place.

"It is not a matter of whether China is willing to participate in the negotiations. It is about the U.S. not showing sincerity at all," Gao said.

China's Global Times tabloid wrote in a commentary that Washington can either respond sincerely to China's determination of opening up and launching goodwill interactions or keep pressuring China with unreasonable demands and escalate trade frictions.

Washington accuses Chinese firms of stealing the trade secrets of U.S. companies and forcing them into joint ventures to acquire their technology - the crux of Trump's current tariff threats against China. Beijing denies this charge.

Trump on Monday also criticised China for maintaining 25 percent import tariffs on autos compared to 2.5 percent duties of the U.S., calling the relationship not free trade but "stupid trade." But Gao said WTO rules do not require equal tariffs and demand for such parity is unreasonable.

He said China will continue opening its markets based on its own plans and implement lower tariffs pledged by Xi as soon as possible.

(Reporting by Se Young Lee and Yawen Chen; Writing by Ryan Woo; Editing by Shri Navaratnam and Sam Holmes)