'Erosion in commitment': USA officials blame China for tariff hike

Wall Street initially tumbled following US President Donald Trump's shock tariff threat against China

Wall Street initially tumbled following US President Donald Trump's shock tariff threat against China

Chinese officials are heading to Washington to try to salvage negotiations aimed at breaking an impasse between the world's two biggest economies over Beijing's aggressive push to challenge American technological dominance. A year ago, Liu told reporters in Washington that talks with Mnuchin, Lighthizer and Secretary of Commerce Wilbur Ross ended with a pledge not to engage in a trade war.

The dispute is upsetting investors.

The Dow Jones Industrial Average plunged almost 600 points Tuesday after Trump administration officials accused Beijing of reneging on commitments it had already made in trade talks.

By the close of trading at 4pm local time, the U.S. markets had substantially recovered.

There was some speculation that Liu might not make the trip after President Donald Trump wrote on Twitter on May 5 that after slow progress on talks, he would increase tariffs on $200 billion worth of Chinese goods from 10 percent to 25 percent beginning May 10, and impose duties "shortly" on $325 billion of now untaxed Chinese goods.

The higher duties would cover thousands of Chinese imports, ranging from baseball gloves to burglar alarms. "We'll see, but I am very happy with over $100 Billion (77 billion pounds) a year in Tariffs filling USA coffers", he added.

"The reason for the China pullback & attempted renegotiation of the Trade Deal is the honest HOPE that they will be able to "negotiate" with Joe Biden or one of the very weak Democrats", Trump said via Twitter.

USA and Chinese trade officials are set to resume negotiations on Thursday and Friday in the hopes of striking a trade deal.

The US accuses China of resorting to predatory tactics in a drive to give Chinese companies an edge in advanced technologies such as artificial intelligence, robotics and electric vehicles.

The Nikkei 225 stock average shed 1.51 percent Tuesday to mark the first closing below 22,000 in almost a month, taking a delayed hit after Japan's financial markets opened following a 10-day market break to mark the ascension of the new emperor to the throne.

According to two people familiar with the U.S.'s position, China backtracked on committing to legal changes that American officials saw as key to selling the deal domestically as the biggest concession any USA administration has ever gotten from China.

The tariffs Trump has threatened are set to go into effect only a day after Liu's arrival. The US now is imposing 10 per cent taxes on $USUS200 billion in Chinese products and 25 per cent on another $USUS50 billion. But how far Beijing will go to stop another round of tariffs, which so far have been imposed on imports worth $360 billion in two-way trade, is questionable.

Reuters reported, citing a person familiar with the talks, that the change in language was tied to Beijing's desire to implement changes to its economy, granting the USA greater access to its markets, by means of administrative and regulatory actions instead of legislation, as had earlier been negotiated.

"If there is no deal between the two superpowers by Friday, we are expecting the global equity markets to drop by at least 20%", said Naeem Aslam, chief market analyst at Think Markets UK.

But stumbling blocks remained, even before Mr Trump accused China of backsliding on what it had already agreed to.

In a tweet on Sunday he said, "The Trade Deal with China continues, but too slowly, as they attempt to renegotiate".

USA trade officials have accused their Chinese counterparts of walking back concessions the two sides had already agreed.

I assume that Trump has examined both the political and economic implications of increasing tariffs on Chinese goods.

Both countries have an incentive to reach a deal.

It also said 10 billion yuan ($1.48 billion) of the bills are for a three-month loan period, and the other 10 billion yuan are in one-year loans. -China trade war probably wouldn't be good for AMD and Nvidia's financial results. The proper response is to do exactly what Trump plans to do - inflict more pain on China.

It only became more apparent in the days after the delegation returned to the U.S., when, according to administration officials, the Chinese backed off earlier plans to include in the written document a commitment to change some of its laws relating to economic practices.

President Xi Jinping's confidant has been Beijing's point man during a grueling series of negotiations.

Trump's May 5 announcement caused Chinese stocks to plummet.

Forecasters at the International Monetary Fund and World Bank have already downgraded the outlook for the global economy. Brent crude, used to price worldwide oils, shed 89 cents to $70.35 per barrel in London. "But for now, come Friday and there will be new tariffs in place".

But exports fell 2.7pc from a year earlier, customs data showed on Wednesday.

Notícias recomendadas

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.