Trump stokes trade war with vow to raise China tariffs

Trump stokes trade war with vow to raise China tariffs

Trump stokes trade war with vow to raise China tariffs

President Donald Trump dramatically increased pressure on China on Sunday to reach a trade deal, saying he would hike USA tariffs on $200 billion worth of Chinese goods this week and target hundreds of billions more soon.

China said Monday its negotiators are still preparing to travel to the USA for trade talks this week despite President Donald Trump threatening Beijing with increased tariffs.

Trump tweeted on Sunday he would consider raising tariffs on $200 billion of Chinese goods from 10 percent to 25 percent.

US-China trade talks are due to resume this week, with Chinese Vice Premier Liu He due to travel to Washington. He also threatened to impose 25% levies on an additional $325 billion of Chinese goods "shortly".

Despite the happy talk from Trump and others in recent days, the US has become frustrated with China's backpedaling on some of its earlier commitments, including on the crucial matter of technology transfer, two people familiar with the situation said.

"We do know the president tends to retreat from more aggressive displays, so I am viewing this thinly veiled threat as political posturing or a tactical decision to apply more pressure on China to put through a trade deal that aligns with the best U.S. economic interest at heart".

Liu's trip and meeting with U.S. officials will most likely be more of a message deliverance rather than a detailed discussion so don't expect trade talks to suddenly advance on the back of this week's session.

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"Let Trump raise tariffs". In total, America has tariffs on US$250 billion of Chinese goods, while China has tariffs on US$110 billion of American goods.

The Wall Street Journal report said that Trump's tweet had taken Beijing by surprise. "People came into this weekend expecting there was a good chance we'd have a trade deal next Friday", said O'Rourke. Last week, the mood among gold investors had turned gloomy, pushing the metal to a four-month low after the U.S. Federal Reserve Chairman Jerome Powell dashed hopes of a rate cut this year.

According to reports, in recent days U.S. officials have become frustrated by China seeking to row back on some earlier commitments in talks.

US equity futures fell more than 2 percent and stocks across trade-reliant Asia tumbled, with China's main indexes plunging 5 percent. "Sorry, we're not going to be doing that anymore!" "Despite the increase in gold prices (on Monday), technical analysis suggests that downward pressure on the yellow metal continues to manifest", OCBC analysts said in a research note, adding that most of the intra-day move was likely related to covering short positions and hedging against market risks. "If it's the latter we'll see massive downside pressure across all markets", he said. "Tariffs paid to the U.S. have had little impact on product cost, mostly borne by China". Let Trump raise tariffs.

The threat, conveyed via Twitter, dashed expectations that the two biggest economies might forge a deal in talks this week.

White House economic adviser Larry Kudlow told Fox News that the president's tweet was a warning.

And if Trump goes ahead, American companies in China "would be very concerned" about official retaliation, said Parker.

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