China's Top Diplomat Mocks U.S.'s ‘Perplexing' Trade Complaints

(Bloomberg) -- Wang Yi may be China’s top diplomat, but on Monday he sounded more like the country’s chief lecturer of economics.

The Chinese foreign minister took advantage of a visit by his U.K. counterpart to give the U.S. a mocking economics lesson, saying American policies were to blame for the country’s trade deficit and the collapse of talks. Wang began in response to a reporter’s trade question, saying “let me share with you some basic facts and I believe you will make an objective and sensible assessment.”

“The U.S. often says that it is taken advantage of, but this is perplexing. It’s like someone who buys a $100 product in a supermarket, has the product in hand, and then complains that he is $100 short,” Wang said. “Does that logic stand up?”

Wang’s defiant remarks underscored deep divisions between the two sides with just a month before the public comment ends on Donald Trump’s proposal to levy tariffs on $200 billion of Chinese goods. While American and Chinese officials have hinted at the possibility of restarting talks, it’s been almost two months they last held high-level negotiations.

“China and the U.S. have had several rounds of consultations and reached important consensus, but regrettably the U.S. did not fulfill its obligations,” Wang said. “Nor did it make concerted efforts with China.”

Wang was adopting a common argument against Trump’s trade policies, in particular his focus on the U.S. trade deficits. A June 18 essay by JP Morgan Chase & Co’s Chief Global Strategist David Kelly titled “My Trade Deficit with Costco” is one example.

“In fact, the U.S. has gained a lot from its trade deficit with China,” Wang said. “It gains massive, inexpensive resources and goods, which increase the welfare of consumers and increase the strength of the dollar.”

U.K. Foreign Secretary Jeremy Hunt -- on his first official Asia trip since assuming the post earlier this month -- looked on awkwardly as Wang criticized his country’s close ally. While the U.K. is seeking alternative sources of trade after leaving the European Union next year, China is courting international support in its trade dispute with the U.S.

Wang said that he and Hunt had agreed to work together to uphold free trade, multilateral agreements and World Trade Organization rules. Still, he said that China was willing to resume talks with the U.S. if the conditions were right.

“China’s door of dialogue and negotiation remains open, but any dialogue must be based on equality and mutual respect,” Wang said. “Any threats or pressure by one side will only be counterproductive.”

To contact Bloomberg News staff for this story: Peter Martin in Beijing at pmartin138@bloomberg.net

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