China Considers Canceling Trade Talks With U.S., WSJ Says

Trump suddenly says he’ll raise China tariffs before talks this week

China Considers Canceling Trade Talks With U.S., WSJ Says

In London, which is also closed for a bank holiday on Monday, futures were down 1%.

Trump wants to keep some, if not all, of the existing tariffs on China as part of any final trade deal to ensure China lives up to its commitments, a White House official said on Sunday.

"The 10 per cent will go up to 25 per cent on Friday".

"For 10 months, China has been paying Tariffs to the U.S. of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods", Trump tweeted Sunday night. He also said he would target a further $325 billion of Chinese goods with 25 percent tariffs "shortly". But on Sunday, Trump said on Twitter a deal with Beijing was coming "too slowly, as they attempt to renegotiate. No!"

US equity futures fell more than 2 percent and stocks across trade-reliant Asia tumbled, with China's main indexes plunging 5 percent.

Chinese markets were harder hit, with shares in Hong Kong down 3.6 per cent in morning trade and indices on the mainland down well over 5 per cent.

A man walks past a U.S. fashion apparel store in Beijing.

But the Wall Street Journal reported on Monday that China was considering cancelling trade talks scheduled for this week following Trump's threats.

A Chinese decision to pull out of talks could have global repercussions, causing turmoil in financial markets and dragging on economic growth, economists said. The Shenzhen component dropped 7.56 percent to finish at 8,943.52.

In this file photo taken May 1, 2019, Chinese Vice Premier Liu He, right, gestures as US Treasury Secretary Steven Mnuchin, centre, chats with his Trade Representative Robert Lighthizer, left, before they proceed to their meeting at the Diaoyutai State Guesthouse in Beijing.

Many market players had anticipated news of a possible deal as early as this week in the dispute over Chinese industrial policies and technology. China has suspended a 25 per cent duty on USA auto imports during their trade negotiations.

"He (Trump) is trying to show the Chinese a little colour, maybe a little punishment".

"I think this has got the potential to be a real game-changer", said Nick Twidale, Sydney-based analyst at Rakuten Securities Australia.

Trump's tweet during the weekend caught the markets and China off-guard, and now there are growing concerns that China will simply walk away from the negotiating table after 10 rounds of discussions over the past six months.

The comment dented Asian equities and oil prices, while boosting the yen, which like the yellow metal, is considered a safe haven during times of a geopolitical or global economic turmoil.

Shares were down between 1.6% and 2.2% in early trading in Germany, France, Italy and Spain, according to Reuters.

A breakthrough in the trade talks could restore normality, he said.

Brent crude, the worldwide standard, gave up $1.51, or 2.1%, to $69.34 per barrel. It gained 13 cents to $61.94 per barrel on Friday.

"We hope the United States will join efforts with China and we can meet each other halfway so we make a mutually beneficial agreement on the basis of win-win and mutual respect", Geng said. The Bloomberg Dollar Spot Index rose 0.3 percent.The euro slipped 0.1 percent to $1.1192.

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