China vows to 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 if U.S. President Donald Trump escalates current tensions.

China President Xi Jinping on Tuesday vowed to open China's economy further and lower import duties on goods such as cars, boosting hopes for an easing of tensions between both nations. Trump responded via Twitter 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 mischaracterized 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, spurring worries of 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.

Meanwhile, U.S. President Donald Trump told reporters on Thursday that talks between Beijing and Washington had been positive: "We're doing really well with China. I think we're having some great discussions, we'll see what happens."

Later, Trump said at a White House event on taxes that China was negotiating "very hard, very long" but he was optimistic about the outcome. "I think it will end up the tariffs off and the barriers down."

China's Global Times tabloid wrote in a commentary that Washington could either respond sincerely to China's determination to conduct interactions showing good will with the U.S. 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 criticised China for maintaining 25 percent import tariffs on autos compared to the 2.5 percent duties of the U.S., calling the relationship "stupid trade." But Gao said WTO rules do not require equal tariffs and demand for such parity is unreasonable.

He said China would continue to open its markets and implement lower tariffs pledged by Xi as soon as possible.

(Reporting by Se Young Lee and Yawen Chen; Additional reporting by Jeff Mason in Washington; Writing by Ryan Woo; Editing by Sam Holmes and Bernadette Baum)