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Business Standard
14-05-2025
- Business
- Business Standard
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 Nandini Singh New Delhi 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.' 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.'
NDTV
14-05-2025
- Business
- NDTV
China Slams US-UK Trade Deal, Calls It 'Poison Pills' Worse Than Tariffs
Quick Reads Summary is AI generated, newsroom reviewed. 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.
Yahoo
14-05-2025
- Business
- Yahoo
China issues warning to UK over terms of US trade deal
China has warned the UK over its new trade deal with the US, accusing Britain of aligning with the US in a move that could compel British companies to exclude Chinese products from their supply chains. The UK-US trade deal, signed last week, offers Britain limited relief from US tariffs on car and steel exports, but only if it complies with strict American security requirements. These conditions include scrutinising supply chains and ownership structures – a move widely interpreted as targeting Chinese involvement. Beijing argues the agreement violates the principle that international agreements should not target third countries, noting this is a 'basic principle'. China's foreign ministry criticised the agreement in a statement to the Financial Times. It said: 'Cooperation between states should not be conducted against or to the detriment of the interests of third parties.' Beijing fears these clauses are designed to pressure allies into excluding Chinese products, in effect isolating China economically. China is doubling down on what it calls 'dual circulation' – boosting domestic production and resilience so its economy can thrive. State-backed companies are being pushed to source components locally, and ministries are funnelling support into advanced manufacturing and green technology. Under the UK-US deal signed last week the US agreed to reduce tariffs on British car exports from 27.5% to 10%, applicable to a quota of 100,000 vehicles annually. Tariffs on UK steel and aluminium have also been lifted, provided British companies meet strict US security conditions, particularly around supply chain transparency and foreign ownership – measures that implicitly limit Chinese involvement. The deal also includes liberalised quotas for US beef and ethanol exports to the UK, alongside a commitment to explore deeper cooperation in pharmaceuticals and advanced manufacturing, contingent again on UK compliance with US security provisions. Related: Chlorinated chicken and hormone-fed beef not crucial to UK trade deal, US suggests The timing of the UK-US trade agreement is sensitive given Keir Starmer's government has been seeking to improve relations with China. Despite the tension, No 10 says the trade deal is intended to secure jobs and protect British businesses. A UK government spokesperson maintained that 'trade and investment with China remain important to the UK', emphasising a pragmatic approach to international relations. Earlier this year, the chancellor, Rachel Reeves, visited Beijing to restart economic and financial dialogues that had been dormant for six years. Other Chinese officials also criticised the UK's decision to accept the US deal's terms, viewing it as a departure from their efforts to rebuild bilateral ties. Zhang Yansheng, a senior researcher at the China Academy of Macroeconomic Research, said the UK's actions were 'not fair to China'. He described the deal's clauses as 'poison pills' that were worse than tariffs.
