friday, 10 may of 2019

US - China

U.S., China Lack Deal But Avoid Rupture After Tariff Hike

U.S. and Chinese officials wrapped up high-level trade talks on Friday, lacking a deal yet avoiding a breakdown in negotiations even after President Donald Trump boosted tariffs on $200 billion in goods from China and threatened to impose more.

The U.S. gave its bottom line in talks in Washington, saying Beijing had three to four weeks more to reach an agreement before the Trump administration enacts additional tariffs on $325 billion of Chinese imports not currently covered by punitive duties, according to two people familiar with the talks.

Treasury Secretary Steven Mnuchin described Friday’s discussions as constructive as he left the U.S. Trade Representative’s office. Chinese Vice Premier Liu He, the top negotiator who led the talks in Washington, told reporters at his hotel that the talks went "fairly well."

Yet several people familiar with the discussions said little progress was made during a working dinner on Thursday and in Friday morning talks. Liu didn’t come prepared to offer much more in the way of concessions, one of the people said.

Liu and his delegation were expected to leave Washington on Friday afternoon, according to a person familiar with their planning.

U.S. stocks fell for a fifth day on Friday, though they climbed from lows of the day after indications from American officials that the two sides will keep talking.

No Rush
Earlier Friday, Trump said there’s “no need to rush” a deal. "Talks with China continue in a very congenial manner -- there is absolutely no need to rush," the U.S. president said on Twitter, before talks resumed. "In the meantime we will continue to negotiate with China in the hopes that they do not again try to redo deal!"

Amid the latest talks, the U.S. moved ahead with plans on Friday to increase the punitive tariff to 25% from 10% on 5,700 different product categories from China -- ranging from cooked vegetables to Christmas lights and highchairs for babies. China said it will be forced to retaliate, though the government didn’t immediately specify how.

Tariff Hike

Top 10 items in U.S. imports from China facing tariff hike from 10% to 25%.

The fresh wave of U.S. tariffs marked a sharp reversal from just last week, when U.S. officials expressed optimism that a pact was within reach. The escalation with China also signaled Trump’s willingness to risk more economic and political damage on his apparent belief that trade wars ultimately are winnable.

Trump

U.S. President Donald Trump said on Friday he was in "absolutely no rush" to finalize a trade agreement with China as negotiators from both countries prepared to continue talks in Washington, in a sign that discussions could go past this week.

In a blizzard of early-morning tweets, Trump defended his decision to slap additional levies on $200 billion worth of Chinese goods, which went into effect earlier Friday, and said the tariffs would boost the United States more than any trade deal.

He also appeared to take aim at U.S. businesses for importing goods or parts from China, calling on them to make more products domestically to avoid paying any extra costs.

"Tariffs will bring in FAR MORE wealth to our country than even a phenomenal deal of the traditional kind," Trump said in a tweet.

U.S. and Chinese officials are to resume negotiations on Friday morning for a second day as the world’s two largest economies seek an agreement.

"Talks with China continue in a very congenial manner - there is absolutely no need to rush," Trump said. "We will continue to negotiate with China in the hopes that they do not again try to redo deal!".

"China should not renegotiate deals with the U.S. at the last minute," he said.

Trump has erroneously insisted China would pay the tariffs but it is U.S. businesses that will shoulder the costs. Some have so far absorbed the levies but prices are up on numerous products as companies pass off the charges to consumers.

U.S. farmers and others are feeling the pinch from previous retaliatory tariffs imposed on their products by Beijing.

China on Friday also threatened to take measures in response to the latest additional tariffs imposed by Trump but gave no other details.

Trump struck a conciliatory note with the U.S. agriculture sector, promising to use federal funds to buy additional American farm products for overseas humanitarian aid.

But any funds from the U.S. tariffs would go into the U.S. Treasury’s general fund, and Congress - not the White House - directs U.S. spending.

U.S. Vice President Mike Pence, in an interview with Fox News taped on Thursday, sounded upbeat on a possible agreement.

"We believe a deal is possible," he said in the interview that aired on Friday.

(Published by Bloomberg, May 10, 2019)
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