Trump’s tariffs bid followed move by China

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Trump’s tariffs bid followed move by China


The US has accused China of currency manipulation. Stock image
The US has accused China of currency manipulation. Stock image

US President Donald Trump said on Wednesday he would be happy to keep tariffs on Chinese imports in place, adding that China is mistaken if it hopes to negotiate trade later with a Democratic presidential administration.

“The reason for the China pullback & attempted renegotiation of the Trade Deal is the sincere HOPE that they will be able to ‘negotiate’ with Joe Biden or one of the very weak Democrats,” Trump tweeted.

“Guess what, that’s not going to happen! China has just informed us that they (Vice-Premier) are now coming to the US to make a deal. We’ll see, but I am very happy with over $100 Billion a year in Tariffs filling US coffers,” he added.

The United States announced on Wednesday it would hike tariffs on $200bn worth of Chinese imports from 10pc to 25pc effective this Friday, according to a notice posted on the Federal Register.

Sources with knowledge of the talks told Reuters that China has sought to alter previously-agreed provisions specifying changes to Chinese laws affecting nearly every chapter of a nearly 150-page proposed trade deal between Washington and Beijing.

The changes sought by China would create major hurdles in reaching a deal in two days of talks with Chinese Vice Premier Liu He this week before the tariff increase goes into effect.

The moves came after a diplomatic cable from Beijing arrived in Washington late on Friday night, with systematic edits to a nearly 150-page draft trade agreement.

The edits are blamed for this week’s blow up between the world’s two largest economies after months of trade talks, according to three US government sources and private sector sources briefed on the talks.

The document was riddled with reversals by China that undermined core US demands, the sources told Reuters.

In each of the seven chapters of the draft trade deal, China had deleted its commitments to change laws to resolve core complaints that caused the United States to launch a trade war: Theft of US intellectual property and trade secrets; forced technology transfers; competition policy; access to financial services; and currency manipulation.

President Trump responded in a tweet on Sunday vowing to raise tariffs on Chinese goods from 10pc to 25pc this Friday.

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The US said on Wednesday the higher tariffs will go into effect on Friday.

The stripping of binding legal language from the draft struck directly at the highest priority of US Trade Representative Robert Lighthizer – who views changes to Chinese laws as essential to verifying compliance after years of what US officials have called empty reform promises.

Mr Lighthizer has pushed hard for an enforcement regime more like those used for punitive economic sanctions – such as those imposed on North Korea or Iran – than a typical trade deal.

“This undermines the core architecture of the deal,” said a Washington-based source with knowledge of the talks.

Spokespeople for the White House, the US Trade Representative and the US Treasury Department did not immediately respond to requests for comment.

Chinese Foreign Ministry spokesman Geng Shuang told a briefing on Wednesday that working out disagreements over trade was a “process of negotiation”.

Investors and analyst have questioned whether the Trump tweets were aimed at winning concessions from China. Sources told Reuters the extent of the setbacks in the revised text were serious and that Trump’s response was not merely a negotiating strategy.

Reuters