European Union urges US, China and Russian Federation to prevent trade ‘conflict and chaos’

China trade surplus with US hits record high in June

That leaves about $80 billion for penalty tariffs after Beijing's previous increases either imposed or threatened on a total of $50 billion of US goods are counted.

Washington added 25 per cent tariffs on $34 billion of Chinese goods on July 6 in response to complaints Beijing steals or pressures companies to hand over technology.

Besides the steel and aluminium tariffs on the EU, Russia and major United States trading partners, Mr Trump earlier this month implemented tariffs on $34 billion worth of Chinese imports, drawing a tit-for-tat response from Beijing.

Analysts expect to see the impact of the tariffs in July's figures.

'"It is the common duty of Europe and China, America and Russian Federation, not to destroy this order but to improve it, not to start trade wars which turn into hot conflict so often in our history, " said Tusk, a former Polish prime minister. The levies could take effect as early as September.

That process usually takes years, they said.

But China and the European Union jointly denounced "protectionism and unilateralism" in a statement Monday and unveiled plans to form a working group tasked with helping the WTO run more smoothly. "Trade wars are not easy to win", he said.

India has flagged concerns of its large trade deficit with China, visa restrictions for Indian professionals and the challenges faced in exporting IT services, meat, rice and medicines to Beijing at the World Trade Organization (WTO). China retaliated with higher duties on a similar amount of American goods.

The trade war is not the only potential drag on the Chinese economy. The country also faces a slowing property market and slower-than-expected domestic consumption.

Playing host to Juncker and European Council President Donald Tusk, Chinese Premier Li Keqiang stressed the need to uphold free trade and multilateralism as the United States and China become increasingly mired in a trade dispute, with no sign of negotiations on the horizon. And separate USA tariffs on aluminum and steel, which hit Canada, Mexico and the European Union, have also led to higher prices on some products, as NPR reported earlier this month.

"Uncertainty about the scale and composition of USA tariffs on China's exports is already dampening business confidence and delaying investment", Louis Kuijs, the head of Asia Economics at Oxford Economics, said in a note.

In the first six months of the year, China's exports to the United States rose 13.6% from a year earlier, while imports from the U.S. increased by 11.8%.

"Despite the heated global rhetoric around trade and associated financial market volatility, China's export sector performed well in the second quarter of the year and will probably prove quite resilient under the limited tariff actions we anticipate from the U.S. and China", he added.

The EU and China have agreed to develop the EU-China strategic partnership at the 20th summit, which comes just hours after President Trump labelled both a "foe".



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