White House warns China on trade, East Sea

By AFP/Andrew Beatty, Dave Clark   January 24, 2017 | 08:15 am GMT+7

A signal of Donald Trump's tough stance against Beijing. 

The White House warned China it will "defend" U.S. and international "interests" in the South China Sea, which Vietnam calls the East Sea, and that trade must be a "two-way street."

Signaling Donald Trump's tough stance against Beijing on Monday, spokesman Sean Spicer said "the U.S. is going to make sure we protect our interests" in the South China Sea.

"If those islands are, in fact, in international waters and not part of China proper, yeah, we'll make sure we defend international interests from being taken over by one country."

China lays claim to a vast extent of the South China Sea within a so-called "nine dash line," including waters claimed by several of its neighbors.

Under president Barack Obama's administration that preceded Trump's, Washington insisted it was neutral on the legal question of sovereignty over the islets, reefs and shoals.

But, while calling for the dispute to be resolved under international law, the U.S. supported freedom of navigation by sending naval patrols through Chinese-claimed turf.

Last week, former ExxonMobil chief executive and secretary of state nominee Rex Tillerson suggested a hardening of this stance, calling China's building of bases on the disputed islands illegal.

"We're going to have to send China a clear signal that, first the island building stops, and second, your access to those islands is also not going to be allowed," he said.

Tillerson's remarks raised the prospect of a confrontation between the world's two greatest powers, and Spicer did nothing from the White House podium to walk them back.

He also took a tough line on trade, returning to Trump's campaign theme that existing rules favor Chinese exports to the United States and cost American jobs.

'Not a two-way street'

Spicer said that Trump is aware that U.S. firms need access to China's large domestic market, but that he is not prepared to accept that current arrangements continue.

"In many cases, it's not a two-way street," he argued.

"There's so many Chinese businesses and individuals frankly, who can have ease of access in the United States to sell their goods or services."

Spicer cited limits on the penetration of U.S. financial and banking services in China, and noted the difficulties of U.S. firms protecting their intellectual property rights.

Trump "understands the market that China has and our desire to further penetrate that market," Spicer argued.

"But he also recognizes there are a lot of concerns with how we are treated entering into China's market and we need to review that."

Trump advisors have mulled declaring China a "currency manipulator," or levying tariffs on Chinese products in a bid offset in the import gap.

Even before taking office, Trump infuriated Beijing accepting a congratulatory phone call from Taiwanese President Tsai Ing-wen.

The move upended decades of diplomatic precedent in which the U.S. president avoided direct public communication with the island's leader.

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