China has pinned the blame of the worsening trade war squarely on the United States, saying that it should bear “sole and entire responsibility” for the talks going south.

In a White Paper released yesterday, Beijing accused Washington of backtracking on three occasions and spelt out the damage that the US has wreaked on its own economy as well as the world’s since the Trump administration took over.

“The trade war has not made America great again,” said the 23-page document, adding that tariff measures have seen production costs balloon for US companies, made goods in the US more expensive and hit US exporters to China.

For an hour yesterday, Vice-Minister for Commerce Wang Shouwen vigorously defended China over accusations of backtracking, intellectual property theft and forced technology transfer, calling them groundless.

“It is irresponsible for the US to smear China. In talks, nothing is agreed until everything is agreed,” he told reporters at a news conference on the White Paper.

The document claimed that the US kept changing its demands during the talks, and outlined how it had backtracked last year and this year by imposing tariffs on Chinese goods even though talks were already under way with the aim of getting rid of all additional tariffs.

“Resorting to intimidation and coercion, it persisted with exorbitant demands, maintained the additional tariffs imposed since the friction began and insisted on including mandatory requirements concerning China’s sovereign affairs in the deal,” stated the document.

Mr Wang said: “When you give them an inch, they want a yard.”

When Washington moved last month to impose additional tariffs on nearly all Chinese products after trade talks soured, Beijing retaliated with tariffs on US$60 billion (S$82.5 billion) worth of US goods, which kicked in on Saturday.

The Chinese authorities also responded to a US ban on technology company Huawei by compiling a blacklist of “unreliable” foreign firms that have violated market rules or hurt Chinese interests.

The White Paper made clear that China wants to resolve the trade dispute through dialogue, but it will not compromise on its principles and is ready to fight a trade war.

As a prerequisite for a trade deal, it wants the US to remove all additional tariffs, be realistic about China’s purchases of US goods and have “proper balance” in the text of the agreement. Chief negotiator Liu He singled these out as sticking points after talks collapsed in Washington last month.

China has also signalled it could play the rare earth card by curbing its exports to the US, whose manufacturing sector imports up to 80 per cent of its rare earth needs from its trade rival.

International relations professor Shi Yinhong of Renmin University said the White Paper did not give further insights into why the talks stalled, but its release reflected the extent to which relations have taken a nosedive since.

China has shown restraint by keeping the fight to the trade and tech domains, where the US has an advantage, said Prof Shi. “If China used North Korea and Iran as retaliatory tools, I think President Donald Trump will feel the pain more.”

Trade tensions may ease if President Xi Jinping and Mr Trump meet later this month at the G-20 Summit in Japan. It is not clear if a meeting will take place. “If they don’t meet, it will be a major international relations embarrassment,” said Prof Shi, who does not think a deal could be reached then. “The divide is too wide. Both think no deal is better than a bad deal, and their definitions of a bad deal have not changed.”

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