Published: Tue, September 18, 2018
Economy | By

China to cancel talks if Trump moves ahead with tariffs, sources say

China to cancel talks if Trump moves ahead with tariffs, sources say

Most recently, the United States imposed $16 billion worth of Chinese goods including motorcycles, railway cars and thermometers in August and China responded by announcing 25 percent duties on 333 US imports worth $16 billion.

Collection of tariffs on the long-anticipated list will start on September 24 but the rate will increase to 25 percent by the end of 2018, allowing US companies some time to adjust their supply chains to alternate countries.

President Donald Trump's expected announcement of new tariffs on $200 billion in Chinese goods drew an immediate threat of reprisals from Beijing.

US President Donald Trump said the latest round of tariffs was in response to China's "unfair trade practices, including subsidies and rules that require foreign companies in some sectors to bring on local partners".

In a statement Monday, $200 billion in additional tariffs were announced and will go into effect September 24.

"We have been very clear about the type of changes that need to be made, and we have given China every opportunity to treat us more fairly".

In July, Trump announced that his administration would offer a $12 billion emergency plan to help offset farmers hard hit by retaliatory tariffs imposed on agricultural products like soybeans, pork and dairy by China and other countries.

China will reject new trade talks if President Donald Trump moves ahead with the next round of USA tariffs on Chinese products, throwing into doubt the prospect of a diplomatic breakthrough, according to two people familiar with the matter.

"China's scope to retaliate is surprisingly limited however, especially since the outbreak of swine flu, which will anyway push up CPI inflation", Beamish said, referring to the deadly swine fever strain that is seen impacting Chinese pork prices.

China is expected to further retaliate against the United States, and top officials have warned that could include penalizing U.S. companies that rely on Chinese components for phones, cars, televisions, and other products.

The firms are anxious the tariffs will increase their costs since many of their products are manufactured in China.

China is one of Apple's largest markets, and the tech giant said increasing tariffs on Chinese goods could harm its business.

"Once again, I urge China's leaders to take swift action to end their country's unfair trade practices", Trump said.

Besides retaliating with tariffs, China could also restrict export of goods, raw materials and components core to U.S. manufacturing supply chains, former finance minister Lou Jiwei told a Beijing forum on Sunday, according to an attendee.

Beijing has since accused the United States of starting the "largest trade war in economic history".

China's Foreign Ministry reiterated that the escalation of the trade conflict was not in anyone's interest. American officials also worry they might erode USA industrial leadership.

In a filing with the government, for instance, Giant Bicycles Inc. of Newbury Park, California, noting that 94 percent of imported bicycles came from China past year, complained that "there is no way our business can shift its supply chain to a new market" to avoid the tariffs and warned "a tariff increase of this magnitude will inevitably be paid for by the American consumer". It is nothing new for the United States to try to escalate tensions so as to exploit more gains at the negotiating table. Tariffs can be effective in narrow cases to offset government subsidies that create cheap exports to the USA and others to boost economic growth, a practice sometimes called "dumping", or to protect endangered domestic industries that have national or cultural importance.

The prospect of a more aggressive trade war with China pushed stocks lower, after investors had previously been largely untroubled by the Trump administration's trade policies.

They also say U.S. economic growth and inflation are likely to have peaked this year, which could help to further turn the tide of market sentiment against the Dollar over coming months. Canada, for instance, imposes high tariffs on some imported dairy products as part of price supports for its farmers. "And they can't take actions that entirely flout the rules of the global trading system", the official said. No items were added, the officials said.

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