Stock Market Attempts a Rebound in Hopes of a Trade Deal

Stocks are shown plunging in graphs on monitors at Barclays Capital booth on the floor of the New York Stock Exchange in New York Tuesday Feb. 22 2011

US Officials REVEAL Reasons Behind New China Tariffs as Trade Talks in Limbo REUTERS Kathy Willens

The Trump administration has threatened to raise tariffs on $200 billion in imports from China to 25% from 10%, starting on Friday.

The US and China have been engaged in a tit-for-tat tariff war since March 2018 when the Trump administration accused China of stealing US intellectual property.

The countries - the world's two largest economies - have been working on a trade deal since December when Trump and his counterpart Xi Jinping met for a dinner and vowed to find common grounds. The notice also said the U.S. Trade Representative's office will establish a process to seek exclusions for certain products from additional tariffs.

U.S. and Chinese trade officials are set to resume negotiations on Thursday and Friday in the hopes of striking a trade deal.

Vice Premier Liu He is heading a delegation set to hold talks with U.S. counterparts in Washington on Thursday and Friday aimed at salvaging a deal, after President Donald Trump threatened to hike tariffs on Chinese goods on Friday.

Mr Trump has also complained repeatedly about America's massive trade deficit with China - a record $USUS379 billion a year ago - which he blames on weak and naive negotiating by previous U.S. administrations.

"That's not going to happen!" he wrote.

Trump said in another tweet that "China has just informed us that they (Vice-Premier) are now coming to the U.S.to make a deal".

China is a key market for U.S. soy bean exports, but a year ago sales plunged by about 75 percent compared to 2017 to just over $3 billion, after China retaliated against United States farmers with 25 percent tariffs. In addition, statements by U.S. Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer this week accusing China of having reneged on commitments to revise the country's trade policies indicate a substantive disagreement rather than an 11th-hour bargaining maneuver. But President Trump's new threats indicate new problems have come up. Mark Warner (D-VA) told Yahoo Finance he doesn't think Trump has a strategy - and China should be addressed with an global coalition.

"Over the course of the last week or so, we have seen an erosion in commitments by China".

He also said that China's vice-premier Liu He would fly to Washington this week for the next stage of talks as originally planned.

Trump took at shot at his Democratic challengers, singling out former Vice President Joe Biden, saying China would prefer to negotiate with them.

Trump's new tariff announcements have tanked stock markets worldwide as investors, like anxious U.S. farmers and businesses, had been banking on a resolution to the year-long conflict that has engulfed $360 billion in two-way trade. He also threatened further tariffs on nearly all other untaxed Chinese goods. The United States also wants other changes including cuts in subsidies to Chinese industry.

That's amusing, considering that has been China's answer to USA trade concerns ever since they got most-favored-nation status a generation ago. That would effectively cover all goods imported into the US from China, including electronic gear, apparel and other products previously exempted from earlier tariff hikes.

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

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