Why the latest US-UK trade deal has set off alarm bells in Beijing

Beijing warns against deals that risk sidelining Chinese industries, as London walks a tightrope between Washington and Beijing

China has criticised a new trade agreement between the United States and the United Kingdom, voicing concern that the deal could be used to edge Chinese products out of British supply chains. The move has added new friction to the UK’s efforts to rebuild strained ties with Beijing, reported Financial Times.

 

The trade pact, signed under the Trump administration, is the first major US deal since the imposition of sweeping reciprocal tariffs last month. It includes strict national security clauses targeting key sectors like steel and pharmaceuticals — provisions that China sees as a direct threat to its economic interests.

 

 

In a statement to the Financial Times, China’s foreign ministry said, “Co-operation between states should not be conducted against or to the detriment of the interests of third parties.”

 

It added that it is a “basic principle” of international trade that agreements should not target other nations. 

 

This strong response from Beijing puts the UK’s new Labour government in a delicate position, caught between the geopolitical priorities of two of the world’s largest economies.

 

China has repeatedly cautioned countries against making bilateral deals with the US that could harm Chinese industries. Officials in Beijing fear that US President Donald Trump is using one-on-one trade talks to pressure partners into cutting China out of global supply chains.

 

While the UK deal offers some tariff relief — particularly for car and steel exports — it still maintains a 10 per cent duty on a wide range of British goods. Crucially, the agreement includes sector-specific clauses tied to 'promptly meeting US requirements' on supply chain security and the 'ownership of production facilities'. 

 

UK officials also told the Financial Times that Trump explicitly indicated China was the intended target of these clauses.

 

This revelation has caused unease in Beijing, especially as UK Prime Minister Sir Keir Starmer’s administration had been signaling a desire to reset UK-China relations. “China will need to respond — the UK should not have rushed to agree to the deal,” said a Chinese government adviser.

 

Zhang Yansheng, a researcher at the China Academy of Macroeconomic Research, warned that the deal could be more damaging than tariffs. “This type of poison pill clause is actually worse than the tariffs,” he said, urging Beijing to “bluntly raise the issue in talks with the UK.”

 

Despite the controversy, London emphasised that trade with China “remained important to the UK” and promised to “engage pragmatically in areas rooted in UK and global interests.”