* Google suspends some business with Huawei
* Latest U.S. warship sailing angers Beijing
* European chip shares skid on Huawei worries
*
By Ben Blanchard and David Lawder
BEIJING/WASHINGTON, May 20 (Reuters) - China accused the
United States on Monday of harbouring "extravagant expectations"
for a trade deal, underlining the gulf between the two sides as
U.S. action against China's technology giant Huawei began
hitting the global tech sector.
Adding to tensions, the U.S. military said one of its
warships sailed near the disputed Scarborough Shoal claimed by
China in the South China Sea on Sunday, the latest in a series
of "freedom of navigation operations" to anger Beijing.
Alphabet Inc's GOOGL.O Google has also suspended business
with China's Huawei Technologies Co Ltd HWT.UL that requires
the transfer of hardware, software and technical services,
except those publicly available via open source licensing, a
source familiar with the matter told Reuters on Sunday.
The decision was a blow to the company the U.S. government
has sought to blacklist around the world.
Shares in European chipmakers Infineon Technologies
IFXGn.DE , AMS AMS.S and STMicroelectronics STM.PA fell
sharply on Monday amid worries the Huawei suppliers may suspend
shipments to the Chinese firm due to the U.S. blacklisting.
The Trump administration's addition of Huawei to a trade
blacklist on Thursday immediately enacted restrictions that will
make it extremely difficult for it to do business with U.S.
counterparts. In an interview with Fox News Channel recorded last week and
aired on Sunday night, Trump said the United States and China
"had a very strong deal, we had a good deal, and they changed
it. And I said 'that's OK, we're going to tariff their
products'."
In Beijing, Chinese Foreign Ministry spokesman Lu Kang said
he didn't know what Trump was talking about.
"We don't know what this agreement is the United States is
talking about. Perhaps the United States has an agreement they
all along had extravagant expectations for, but it's certainly
not a so-called agreement that China agreed to," he told a daily
news briefing.
The reason the last round of China-U.S. talks did not reach
an agreement is because the United States tried "to achieve
unreasonable interests through extreme pressure", Lu said.
"From the start this wouldn't work."
China went into the last round of talks with a sincere and
constructive attitude, he said.
"I would like to reiterate once again that China-U.S.
economic and trade consultation can only follow the correct
track of mutual respect, equality and mutual benefit for there
to be hope of success."
No further trade talks between top Chinese and U.S.
negotiators have been scheduled since the last round ended on
May 10 - the same day Trump raised the tariff rate on $200
billion worth of Chinese products from 10 percent.
Trump took the step after the United States said China
backtracked on commitments in a draft deal that had been largely
agreed.
STERNER TONE
Since then, China has struck a sterner tone, suggesting that
a resumption of talks aimed at ending the 10-month trade war
between the world's two largest economies was unlikely to happen
soon. Beijing has said it will take "necessary measures" to defend
the rights of Chinese companies but has not said whether or how
it will retaliate over the U.S. actions against Huawei.
Later on Monday, the official China Daily also lambasted the
latest U.S. actions in a strongly worded editorial, saying that
with its treatment of Huawei, the U.S. government had revealed
all its ugliness in its dealings with other countries.
"It seems as if the U.S. takes it for granted that it has
the absolute say over everything in its dealings with the rest
of the world, which has to take whatever the U.S. dishes out no
matter how arbitrary and despotic that is," China Daily said.
"But China will not take it and neither will Huawei."
The editor of the Global Times, an influential tabloid run
by the ruling Communist Party's People's Daily, tweeted on
Monday that he had switched to a Huawei phone, although he said
his decision did not mean that he thinks it is right to boycott
Apple and that he was not throwing away his iPhone.
"While the U.S. spares no efforts to subdue Huawei, out of
personal belief, I chose to support the well respected company
by using its product," Hu Xijin tweeted.
Trump, who said the interview with Fox News host Steve
Hilton had taken place two days after he raised the tariffs,
said he would be happy to simply keep tariffs on Chinese goods,
but that he believed China would eventually make a deal with the
United States "because they're getting killed with the tariffs".
But he said he had told Chinese President Xi Jinping before
the most recent rounds of talks that any deal could not be
"50-50" between the two countries and had to be more in favour
of the United States because of past trade practices by China.