Donald Trump hikes tariffs on Chinese imports, as 'congenial' talks resume

Andrew Cummings
May 12, 2019

After a short session on Friday, the lead Chinese negotiator, Vice Premier Liu He, left the Office of the US Trade Representative at about midday.

Liu said both sides agreed to keep talking, despite what he called "some temporary resistance and distractions, " and to hold meetings in Beijing.

President Donald Trump, meanwhile, raised tariffs on $200 billion in Chinese goods and ordered officials to launch the process to impose custom duties on another $300 billion worth of imports - nearly everything China ships to the US.

Second, Chinese President Xi Jinping and US President Donald Trump agreed to a preliminary figure for purchases of US goods when they declared a trade truce in Argentina past year, he said.

Hours earlier, the Trump administration hiked tariffs on 200 billion dollars (£155 billion) worth of Chinese imports to 25% from 10%, escalating tensions between Beijing and Washington.

"U.S. wheat growers are facing tough times right now, and these additional tariffs will continue to put a strain on our export markets and threaten many decades worth of market development", said Ben Scholz, NAWG president and a wheat farmer in Texas.

Three differences remain between the two countries, according to China's account of the latest talks.

Chinese and United States representatives met in Washington over two days, ending on Friday, with plans for further talks to be held in China. "The relationship between President Xi and myself remains a very strong one, and conversations into the future will continue", he said.

"Of course, China believes raising tariffs in the current situation is not a solution to the problem, but harmful to China, to the United States and to the whole world".

The seemingly positive messages - coming before the announcement that Trump had ordered the latest round of tariffs - had cheered Wall Street with shares rising after being under pressure all week. "We think these differences are significant issues of principle", Liu said.

Beijing has counterpunched by taxing $110 billion (NZ$166 billion) of American products, focusing on agricultural goods, notably soybeans, in a calculated effort to inflict pain on Trump supporters in the farm belt.

The National Retail Foundation said it's concerned "we are shooting ourselves in the foot", while Sen.

In an interview with reporters later in the day, Vice Premier Liu He said: "We will make no concessions on matters of principle".

Yang Delong, chief economist at First Seafront Fund Management in Shanghai, told AFP that the "sudden hardening" of Trump's tone is likely linked to the 2020 presidential election.

Beijing's tactics, the United States contends, include hacking into U.S. companies' computers to steal trade secrets, forcing foreign companies to turn over sensitive technology in exchange for access to China's markets and unfairly subsidising Chinese companies. Similar to Liu, Chinese state media said China would not give in on its core interests.

Washington wants Beijing to tighten its intellectual property protections, cut its subsidies to state-owned firms and reduce the yawning trade deficit; China wants an end to tariffs as part of a "balanced" deal.

In a series of tweets that cheered markets, Trump declared Friday that the talks with China had been candid and constructive.

He claimed that the tariffs would "bring in far more wealth to our country than even a phenomenal deal of a traditional kind".

Government sources told Reuters that last week China had backtracked on its commitments made in a 150-page draft agreement.

Representative as USA and Chinese officials hold tariff negotiations in Washington "While we are disappointed that the stakes have been raised, we nevertheless support the ongoing effort by both sides to reach agreement on a strong, enforceable deal that resolves the fundamental, structural issues our members have long faced in China", said business lobby the American Chamber of Commerce in China.

"This delay means that the majority of tariffs will not be collected for roughly two weeks at minimum, as goods shipped before the tariff hike make their way across the Pacific", they wrote in a report. He said the earlier 10% increase was absorbed by companies and offset by a weakening of the Chinese currency's exchange rate.

Other reports by iNewsToday