Shoppers browse smartphones at a Huawei retail store in Hangzhou in eastern China's Zhejiang province. Image Credit: AP

Beijing: China warned the United States on Thursday against further harming trade ties after President Donald Trump effectively barred Chinese telecom giant Huawei from the US market, escalating tensions between the world’s top economic powerhouses.

The spat over Huawei adds to the uncertainty over efforts to revive a deal that would end a bruising US-China trade war after the two sides exchanged fire with tariff hikes in recent days. The Chinese commerce ministry said Thursday it had no information on a US plan to come to Beijing to continue talks, after US Treasury Secretary Steven Mnuchin said he would likely visit China in the near future.

“The US’s bullying and maximum pressure tactics have caused the China-US economic and trade talks to suffer a serious setback,” ministry spokesman Gao Feng told a weekly press briefing.

Trump stepped up the US battle against Huawei on Wednesday when he signed an executive order prohibiting the purchase or use of equipment from companies that pose “an unacceptable risk to the national security of the United States” or the safety of the American people.

While the White House insisted that no particular country or company was targeted, Huawei is likely to be hit by the move amid concerns that its equipment could be used by Chinese intelligence services.

The US Commerce Department followed up with a more direct hit on the tech giant, adding it to a blacklist that will make it much harder for the firm to use crucial US components in its array of phones, telecom gear, databases and other electronics.

“We urge the US to stop its incorrect actions ... to avoid doing additional harm to China-US economic and trade relations,” Gao said. “China has said many times national security issues should not be abused.”

Gao, the Chinese commerce ministry spokesman, said that to reach a trade deal all tariffs must be scrapped, demands for Chinese purchases of US goods must be realistic and the pact must be “balanced”.

“The escalation of China-US trade frictions will have a definite impact on the economies of the two countries and the world economy,” he said. “As far as the Chinese economy is concerned, the impact is completely controllable,” Gao said, adding “China does not fear any pressure, and has the confidence, resolution and ability to respond to any risk and challenge”.

China formally arrests 2 Canadians in Huawei case

China has formally arrested two Canadian citizens it is believed to be holding to pressure Canada into releasing a Chinese telecoms executive, bringing the two men closer to trial on vaguely defined state security charges.

Chinese foreign ministry spokesman Lu Kang said Thursday that Michael Kovrig and Michael Spavor have been arrested for allegedly stealing state secrets. “We always act in accordance with the law, and we hope that Canada will not make irresponsible remarks on China’s legal construction and judicial handling,” Lu said at a news conference. Lu gave no other details. Kovrig is a former Canadian diplomat and expert at the International Crisis Group, and Spavor is a businessman with lengthy experience in North Korea.

China had earlier accused the two of conspiring together to steal Chinese state secrets.

Canada strongly condemned their “arbitrary arrest.”

“We reiterate our demand that China immediately release Mr. Kovrig and Mr. Spavor,” Brittany Fletcher, a spokeswoman for Global Affairs Canada, said Thursday.

Both were detained on Dec. 10 after Meng Wanzhou, a senior executive with telecoms giant Huawei, was arrested in Vancouver, Canada, on Dec. 1 at the request of US authorities who want her extradited to face fraud charges. Meng, the daughter of Huawei’s founder, is accused of lying to banks about the company’s dealings with Iran in violation of US trade sanctions. Her attorney has argued that comments by US. President Donald Trump suggest the case against her is politically motivated.

— AP