U.S. President Donald Trump said on Wednesday (May 8) that he would be happy to keep tariffs on Chinese imports as the two countries prepare for new talks to try to rescue a faltering trade deal amid a sharp increase in U.S. duties as he charged China with “breaking the deal.”
The U.S. Trade Representative’s office announced that tariffs on $200 billion worth of Chinese goods would increase to 25 percent from 10 percent at 12:01 a.m. ET (0401) GMT on Friday (May 10), right in the middle of two days of meetings between Chinese Vice Premier Liu He and Trump’s top trade officials in Washington.
Beijing announced it would retaliate if tariffs rise.
“The Chinese side deeply regrets that if the U.S. tariff measures are implemented, China will have to take necessary countermeasures,” China’s Commerce Ministry said on its website, without elaborating.
The world’s two largest economies have been embroiled in a tit-for-tat tariff war since July 2018 over the U.S. demands that the Asian powerhouse adopt policy changes that would, among other things, better protect American intellectual property and make China’s market more accessible to U.S. companies.
Expectations were recently riding high that a deal could be reached but a deep rift over the language of the proposed agreement opened up last weekend.
Reuters, citing U.S. government and private-sector sources, reported on Wednesday that China had backtracked on almost all aspects of a draft trade agreement, threatening to blow up the negotiations and prompting Trump to order the tariff increase.
Trump, who has embraced largely protectionist policies as part of his “America First” agenda, warned China on Wednesday that it was mistaken if it hoped to delay a trade deal until a Democrat controlled the White House.
The United States is demanding that Beijing make sweeping changes to its trade and regulatory practices, including protecting U.S. intellectual property from theft and forced transfers to Chinese firms, curbs on Chinese government subsidies and increased American access to China’s markets.
Trump also has sought massive hikes in Chinese purchases of U.S. farm, energy, and manufactured products to shrink a gaping U.S. trade deficit with China.
Sources familiar with the talks said China’s latest demands for changes to a 150-page document that had been drafted over several months would make it hard to avoid the U.S. tariff hike on Friday.
That increase would affect Chinese imports from computer modems and routers to vacuum cleaners, furniture, lighting, and building materials. (REUTERS)