China Signals U.S. Trade War Risks Undermining North Korea Talks

(Bloomberg) -- China's ambassador to the United Nations signaled that an escalating trade war with the U.S. could undermine efforts to reach one of President Donald Trump's top foreign policy priorities: a nuclear deal with North Korea.

“We should also remind ourselves that if we want to cooperate, we have to demonstrate to your partner the spirit of cooperation,” Ambassador Zhang Jun, who arrived in New York less than a week ago, told reporters at the UN on Friday. “It will be hard to imagine that on the one hand you're seeking the cooperation from your partner but on the other hand you're hurting the interest of your partner.''

The comments came a day after Trump abruptly announced that he will impose a 10% tariff on a further $300 billion in Chinese imports starting Sept. 1. That followed a shortened visit to Beijing by U.S. trade negotiators, with the two sides agreeing to meet again in September.

Beijing's support was critical to Trump's efforts to secure international sanctions against North Korea's nuclear program in 2017, and given China's historic role as North Korea's biggest trading partner, its cooperation remains essential to sustaining economic pressure on Kim Jong Un's regime. The Trump administration has long viewed China's help with North Korea as separate from other policy disputes, but it's never been clear that Beijing agrees.

‘We Will Fight'

“If the U.S. wishes to talk, then we will talk,” Zhang said. “If they want to fight, then we will fight. We will never sacrifice our fundamental interests. We are not only fighting for China alone, we are also fighting for an open international economy, for free trade, for an open, non discriminatory, and reliable multilateral trading system.''

Speaking in Bangkok earlier on Friday, Secretary of State Michael Pompeo said China has been using predatory trade tactics and taken advantage of trade for decades.

Zhang also signaled that China's support for the existing sanctions isn't indefinite.

“What we're trying to do is to be helpful in promoting peace and stability there and to promote denuclearization,'' he said. “It's also for that purpose that we think at the appropriate time, action should be taken to ease the sanctions, but we are still consulting with each other and we have not made any final decision.”

North Korea on Friday conducted its third test in a week of a new short-range ballistic missile that weapons experts say was designed to strike U.S. allies in East Asia. Trump said that North Korea's recent tests of short-range rockets and missiles may run afoul of United Nations resolutions but haven't violated agreements with his administration -- or his “trust” of Kim.

Zhang also warned the international community not to interfere with Beijing's handling of protests in Hong Kong or its detainment of Uighurs in the western province of Xinjiang. Demonstrations began nearly nine weeks ago over opposition to legislation easing extraditions to China, and demands have since widened to include Chief Executive Carrie Lam's resignation, the release of people detained at previous protests and an inquiry into the police's use of force.

“We will never allow any country, any group of people, any individual to interfere in China's internal affairs, especially on issues related to Xinjiang, Tibet and to Hong Kong,'' he said. “The demonstration has gone far beyond the nature of a peaceful demonstration. It has really turned out to be chaotic and violent and we should no longer allow them to continue this reprehensible behavior.”

To contact the reporter on this story: David Wainer in New York at dwainer3@bloomberg.net

To contact the editors responsible for this story: Bill Faries at wfaries@bloomberg.net, Wendy Benjaminson

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