China prepares retaliation to USA tariffs hike

Mnuchin Liu He Lighthizer

China prepares retaliation to USA tariffs hike

The spokesman, Geng Shuang, spoke just hours after the US raised tariffs Friday on $200 billion in imports from China to 25% from 10%.

Trump, who has adopted protectionist policies as part of his "America First" agenda aimed at rebalancing global trade and boosting USA manufacturing, accused Beijing of reneging on commitments made during months of negotiations.

The increase went ahead even as American and Chinese negotiators began another round of talks in Washington aimed at ending a battle that has disrupted billions of dollars in trade and shaken global financial markets.

"We hope the United States will meet us halfway, and work with us to resolve existing issues through cooperation and consultation", the statement from China's Ministry of Commerce said.

Since the tariffs will only apply to goods leaving port after the deadline, there is still time for Chinese Vice Premier Liu He and chief US trade negotiator Robert Lighthizer and Treasury Secretary Steven Mnuchin to forge a deal before the tariffs come into effect.

Chinese vice premier Liu He, US trade representative Robert Lighthizer and US treasury secretary Steven Mnuchin talked for 90 minutes on Thursday and were expected to resume talks on Friday.

The higher tariffs will be applied to relevant US-bound goods exported from China on or after Friday, according to a notice from the US Federal Register.

China wants tariffs lifted as soon as an agreement is reached, while US officials want to keep them as leverage to ensure compliance. Economists at Moody's Analytics said in a report this week that an all-out trade conflagration between the world's two-largest economies risked tipping the usa economy into recession by the end of 2020 just as voters go to the polls in the U.S.

President Trump tweeted, deleted, then retweeted about there being "absolutely no need to rush" trade talks with China - sending the stock market on a roller coaster Friday morning.

"We can't have that", he said. If we bought 15 Billion Dollars of Agriculture from our Farmers, far more than China buys now, we would have more than 85 Billion Dollars left over for new Infrastructure, Healthcare, or anything else.

'I think the Trump administration is quite serious about imposing tariffs, ' Kennedy said.

The higher import taxes apply to Chinese goods shipped on or after Friday. But it would have significant repercussions for the U.S., Chinese and global economies. Commerce Ministry spokesman Gao Feng said the decision to send Liu to Washington despite the tariff hike threat demonstrated China's "utmost sincerity". The S&P 500 fell almost 3% for the week after Trump threatened higher tariffs on May 5.

David French of the U.S. National Retail Federation said in a VOA interview "a negotiating strategy based on tariffs is the wrong direction" and expressed hope the Chinese "make substantial concessions to avert this disaster". China promised to respond to Friday's tariffs as well, but has yet to specify how it will do so.

But due to a quirk in the implementation of the higher tariffs, products already on ships headed for US ports before midnight will only pay the 10 percent rate, US Customs and Border Protection explained. The International Monetary Fund estimates the pullback on the USA expansion at about 0.2 point, and potentially more if there's a blow to markets and confidence.

The move comes as high-level officials from both sides hold trade talks in Washington.

Consumers are also feeling some pain: The American Apparel and Footwear Association estimates that a 25% tariff on apparel imports will increase costs for a family of four by $500 a year.

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