WASHINGTON: USPresident Donald Trump cranked up the heat in a trade battle with China onFriday, ordering a tariff hike on almost all remaining imports from the world'ssecond-biggest economy, but Beijing said talks would continue to resolve therow. After tweeting that two days of trade talks in Washington had been"candid and constructive," the businessman-turned-politician changedtack and followed through on a threat he had been making for months.
"ThePresident... ordered us to begin the process of raising tariffs on essentiallyall remaining imports from China, which are valued at approximately $300billion," US Trade Representative Robert Lighthizer said in a statement.The move came less than 24 hours after Washington increased punitive duties on$200 billion worth of Chinese imports, raising them to 25 percent from 10percent, days after the Trump administration accused Beijing of reneging on itscommitments.
Details on theprocess for public notice and comment will be posted Monday, ahead of a finaldecision on the new tariffs, Lighthizer said. They were not expected to go intoeffect for several months. China's top trade negotiator, Vice Premier Liu He,had warned earlier that Beijing "must respond" to any UStariffs. The developments came as twodays of talks to resolve the trade battle ended Friday with no deal, but noimmediate breakdown either, offering a glimmer of hope that Washington and Beijingcould find a way to avert damage to the global economy.
"Over thecourse of the past two days, the United States and China have held candid andconstructive conversations on the status of the trade relationship between bothcountries," Trump tweeted. "The relationship between President Xi(Jinping) and myself remains a very strong one, and conversations into thefuture will continue." The tariffs on China "may or may not beremoved depending on what happens with respect to future negotiations!"
Liu toldreporters the talks had been "productive" and said the two sideswould meet again in Beijing at an unspecified date, but he warned that Chinawould make no concessions on "important principles.""Negotiations have not broken down, but rather on the contrary, this isonly a normal twist in the negotiations between the two countries, it isinevitable," Liu said. The seemingly positive messages-coming before theannouncement that Trump had ordered the latest round of tariffs-had cheeredWall Street with shares rising after being under pressure all week.
US TreasurySecretary Steven Mnuchin and Lighthizer met for about two hours with Liu onFriday and then headed for the White House to brief Trump, who had said he wasin no hurry to reach a deal, arguing the United States was negotiating from a positionof strength. "We have a consensus in lots of areas but to speak franklythere are areas we have differences on, and we believe these concern bigprinciples," Liu said.
Liu pointed tothree major areas of disagreement: whether to cancel all trade war tariffs whenan agreement is reached, the exact size of Chinese purchases of US goods, and a"balanced" agreement text. "Any country needs its own dignity,so the text must be balanced," Liu said. Liu and his backer Xi cannot beseen as giving in too much with trade concessions to the US in fear oftriggering comparisons to past "unequal treaties" forced on China inthe 19th and 20th centuries. "Every country has important principles, andwe will not make concessions on matters of principle," Liu said.
'Darkness beforedawn'
Yang Delong,chief economist at First Seafront Fund Management in Shanghai, told AFP thatthe "sudden hardening" of Trump's tone is likely linked to the 2020US presidential election. "The US hopes China will make greater concessionsin many areas, these concessions might harm a foundation of our economicdevelopment or impact our institutional reform," Yang said.
"When itcomes to core interests China is not able to yield," he said. Washingtonis pressing China to change its policies on protections for intellectualproperty, as well as massive subsidies for state-owned firms, and to reduce theyawning trade deficit. After weeks of rising optimism about the chances for anagreement, the tone out of the White House has veered from anger tononchalance.
In a series ofearly morning tweets Friday, Trump said there was "absolutely no need torush" towards a deal. The US leader continues to argue that tariffs couldin some ways be preferable to reaching a trade deal. "Tariffs will bringin FAR MORE wealth to our country than even a phenomenal deal of thetraditional kind," Trump wrote. Since last year the United States andChina have exchanged tariffs on more than $360 billion in two-way trade,weighing on both countries' economies.
Economists stressthat duties are paid by US companies and consumers and result in higher prices,while farmers and manufacturers complain about the loss of markets for theirexports due to retaliation from China. Liu compared the negotiations to amarathon: "When you get to the last stage it is comparatively the hardeststage, now we need to hold on, it is the darkness before dawn." - AFP