[Text/Observer Network Xiong Chaoyi] Last week, the United States and the United Kingdom signed what they called the "first tariff trade agreement." The U.S. imposed strict so-called "security" clauses on British strategic sectors such as steel and pharmaceuticals, which were covertly aimed at China's supply chain.

According to a report by the Financial Times on May 13, when asked about this agreement, Chinese officials emphasized a "basic principle" — that cooperation between countries should not violate or harm the interests of third parties. The report believes that China's remarks may pose greater challenges for the UK government when it seeks to restart relations with China, placing London in a "difficult position" between the two economic superpowers, the U.S. and China.

Zhang Yansheng, a researcher at the National Macroeconomic Research Institute, believes that the UK's move is unfair to China, and the U.S. will also force other countries to accept similar terms in trade negotiations in an attempt to "isolate China." He pointed out that these "poison pill" clauses are actually worse than tariffs, and the fundamental issue lies with the U.S. China should raise this issue in its trade negotiations with the U.S.

On May 8 local time, the UK and the U.S. announced the trade agreement via video call. BBC Video Screenshot

On May 9 local time, the Financial Times cited trade and diplomatic sources as reporting that in this agreement between the UK and the U.S., the U.S. imposed strict so-called "security" clauses on British strategic sectors such as steel and pharmaceuticals, requiring related industries to "meet American requirements regarding supply chain security and ownership of production facilities as soon as possible" to obtain tariff exemptions or reductions from the U.S.

The report stated that although these clauses appear to apply to all third countries on the surface, British officials admitted to the Financial Times that Trump had hinted that China was the target.

Alice Renison, a former UK trade official, believed that this move by the Trump administration was essentially an upgrade of the U.S. government's long-term policy of restricting China's participation in the global strategic commodity supply chain. "Washington hopes that the UK and other countries will disclose critical information and ultimately sever their economic and trade ties with China, especially in sensitive sectors like steel."

Renison also said that if the final agreement between the UK and the U.S. shows that the UK has further aligned with the U.S. position on trade with China in exchange for tariff exemptions, China may retaliate in some form. A diplomatic source further pointed out that these so-called "security" clauses with the UK could become a "template" for the U.S. to pressure other allies to exclude China from key supply chains, coercing allies like the UK to reduce trade and investment cooperation with China in sensitive areas.

The Financial Times reported that to prevent President Trump from using bilateral negotiations with trade partners to force them to exclude China from supply chains, China has clearly stated that countries should not sign trade agreements that threaten China's interests. Meanwhile, China has accelerated actions to remove foreign-made components from its own supply chain to shield itself from the impact of a trade war.

The report quoted a UK government trade advisor who said that China was surprised and concerned about the UK accepting the U.S. "security" clauses, especially since the government led by Prime Minister Starmer has been striving to improve relations with China. An anonymous Chinese source said, "China will need to respond, and the UK should not rush to agree to this deal."

In late February, UK Prime Minister Starmer visited the White House to meet with U.S. President Trump. Material picture

A spokesperson for the Ministry of Commerce of China previously stated that China noticed that some economies were negotiating with the U.S. It needs to be emphasized that appeasement does not bring peace, compromise does not earn respect, and standing firm on principles and upholding fairness and justice are the correct ways to safeguard one's own interests. No matter how international situations change, China will always unswervingly expand openness, unswervingly uphold the multilateral trading system centered on the WTO, and unswervingly share development opportunities with all countries. China is willing to work with all parties to continuously deepen mutually beneficial cooperation, strengthen communication and coordination, jointly resist unilateral protectionism and hegemony, jointly uphold free trade and multilateralism, and promote inclusive and inclusive economic globalization.

Zhang Yansheng, a researcher at the National Macroeconomic Research Institute, said that it is clear that the U.S. will force other countries' governments to accept similar terms in trade negotiations to achieve the goal of "isolating China." "This is unfair to China," he added. "These 'poison pill' clauses are actually worse than tariffs."

Zhang Yansheng believed that China should not immediately take countermeasures but should directly raise this issue in talks with the UK. "The fundamental problem lies with the U.S., and other countries are only secondary participants," he added: "This issue needs to be discussed in trade negotiations with the U.S."

From May 10 to 11, high-level trade talks between China and the U.S. were held in Geneva, Switzerland. Both sides agreed to reduce tariffs within 90 days, lowering the rate by 115%.

On May 12, a spokesperson for the Ministry of Commerce of China made a statement on the joint statement of the China-U.S. Geneva trade talks, saying that the talks reached a joint statement, which was an important step towards resolving differences through equal dialogue and consultation, laying the foundation and creating conditions for further bridging gaps and deepening cooperation.

The two sides reached several positive consensuses in the joint statement. Both sides recognized the importance of bilateral economic and trade relations to both countries and the global economy, and the importance of sustainable, long-term, and mutually beneficial bilateral economic and trade relations. They continued to advance relevant work with a spirit of mutual openness, continuous communication, cooperation, and mutual respect.

The spokesperson said that both sides agreed to establish a China-U.S. economic and trade consultation mechanism to maintain close communication on each other's concerns in the economic and trade field and conduct further consultations. The Chinese representative was Vice Premier He Lifeng, and the U.S. representatives were Treasury Secretary Besante and Trade Representative Greer. Both sides would hold consultations in China, the U.S., or agreed third countries on a regular or irregular basis. As needed, the two sides could conduct working-level consultations on relevant economic and trade issues.

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Original text: https://www.toutiao.com/article/7504090436165550592/

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