China Slams US-UK Trade Deal, Calls It 'Poison Pills' Worse Than Tariffs

NDTV

14-05-2025

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China criticises the UK-US trade deal, fearing it pressures British firms to exclude Chinese products. The deal offers limited tariff relief but imposes strict US security requirements, raising concerns in Beijing about economic isolation and fairness.
China has expressed concerns over the UK's new trade deal with the US, accusing Britain of aligning itself with the US in a manner that could pressure British companies to exclude Chinese products from their supply chains.
According to China's foreign ministry, "Cooperation between states should not be conducted against or to the detriment of the interests of third parties." This stance is rooted in the belief that international agreements should not target third countries, a principle Beijing considers 'basic'.
The UK-US trade deal, signed last week, provides Britain with limited relief from US tariffs on car and steel exports. However, this relief comes with strict American security requirements, including scrutiny of supply chains and ownership structures. These conditions are widely seen as targeting Chinese involvement.
Under the deal, the US will reduce tariffs on British car exports from 27.5% to 10% for a quota of 100,000 vehicles annually. Additionally, tariffs on UK steel and aluminium have been lifted, provided British companies meet specific US security conditions related to supply chain transparency and ownership structures.
These conditions have raised concerns in Beijing, with Zhang Yansheng, a senior researcher at the China Academy of Macroeconomic Research, describing the deal's clauses as "poison pills" that are worse than tariffs. He believes the UK's actions are "not fair to China".
China's apprehensions stem from the potential economic isolation that could result from such agreements, prompting the country to focus on boosting domestic production and resilience through "dual circulation". This strategy involves state-backed companies sourcing components locally and government support for advanced manufacturing and green technology.
Despite these tensions, the UK government maintains that the trade deal aims to secure jobs and protect British businesses. A UK government spokesperson emphasised a pragmatic approach to international relations, stating that "trade and investment with China remain important to the UK". This comes after Chancellor Rachel Reeves visited Beijing earlier this year to revive economic and financial dialogues that had been dormant for six years.
The UK-US deal also includes liberalised quotas for US beef and ethanol exports to the UK and a commitment to explore deeper cooperation in pharmaceuticals and advanced manufacturing, contingent on UK compliance with US security provisions.