China Says 'Overcapacity' Talk an Excuse for Protectionism

National Security Adviser Jake Sullivan told China's foreign minister that the U.S. is still concerned about the Chinese government's "unfair trade policies and non-market economic practices," according to a White House readout that focused more on military and law enforcement issues than trade.

However, the Chinese readout of the two days of meetings between Sullivan and China's Foreign Minister Wang Yi gave trade more attention, and complained about what China sees as efforts to suppress its development.

"Wang Yi pointed out that the security of all countries must be common, comprehensive, cooperative and sustainable, and the security of one country cannot be built on the basis of the insecurity of other countries. National security needs to have clear boundaries, especially in the economic field, which must be scientifically defined. The United States should stop suppressing China in the fields of economy, trade and science and technology, and stop undermining China's legitimate interests. Using 'overcapacity' as an excuse to engage in protectionism will only harm global green development and affect world economic growth," the Chinese readout said.

The U.S. is planning to levy 100% Section 301 tariffs on Chinese electric vehicles, up from 25% in the current trade action, as well as higher tariffs on Chinese EV batteries and utility scale batteries, solar panels and other goods in the green tech space. It has also convinced Canada to erect similar trade barriers to its market.

Before the meeting, a Chinese government official complained, "The U.S. side's continuous arbitrary measures against China in the areas of tariffs, export control, investment review and unilateral sanctions seriously undermine China's legitimate rights and interests. China demands that the U.S. side stop turning economic and trade issues into political and security issues."

However, the Chinese readout also said Sullivan said: The "United States has no intention of decoupling from China."