‘Price must be paid’

China warned yesterday that US legislation calling for a tougher response to Beijing's treatment of its Uighur Muslim minority will affect bilateral cooperation, clouding prospects for a near-term deal to end a trade war.

Expectations of a quick deal had receded already, after US President Donald Trump said on Tuesday that it might take until late 2020 to reach agreement.

Approval by the US House of Representatives of the Uighur Act of 2019, which still requires passage by the Republican-controlled Senate before being sent to Trump, has angered Beijing and further strained an already testy relationship.

Several sources familiar with Beijing's stance told Reuters that the bill could jeopardise the so-called phase one trade deal already fraught with disagreements and complications.

With a new round of US tariffs on Chinese goods scheduled to take effect in less than two weeks, the possibility of another breakdown is growing.

"Do you think if America takes actions to hurt China's interests we won't take any action," Chinese foreign ministry spokeswoman Hua Chunying told reporters when asked whether the Uighur bill would affect the trade negotiations. "I think any wrong words and deeds must pay the due price."

Negotiators have continued to work on the trade deal. But sources familiar with the talks say the two sides are still wrangling over the details including whether existing US tariffs on Chinese goods will be removed and how much in additional US agricultural products China will buy.

Bloomberg reported yesterday that Washington and Beijing are "moving closer" to agreeing on how much tariffs would be rolled back in an initial trade deal despite the Hong Kong and Xinjiang issues, citing people familiar with the talks.

US Commerce Secretary Wilbur Ross told CNBC on Tuesday that staff-level trade negotiations with China were continuing but no high-level trade talks had been scheduled.