Economy

China trade talks will continue, but so will the tariffs

China trade talks will continue, but so will the tariffs”

United States and Chinese negotiators resumed trade talks today under increasing pressure after President Donald Trump raised tariffs on US$200 billion in Chinese goods and Beijing promised to retaliate, escalating a battle over China's technology ambitions.

This is evident from Liu's continued presence in Washington and China's muted response. "That doesn't sound like much, but if it happens when there's a broader slowdown, it adds to the momentum and can make matters much worse", he says.

"It has been troubling for our farmers... but a lot of the farmers support the President because they see the risk and the threat from China", he said on Thursday.

"I think that China felt they were being beaten so badly in the recent negotiation that they may as well wait around for the next election, 2020, to see if they could get lucky & have a Democrat win - in which case they would continue to rip-off the U.S. for $500 Billion a year", he tweeted.

Even if the tariffs become a permanent fixture of the trade relationship - an unlikely prospect, according to observers - they are not likely to bring the Chinese economy crashing down. Trump had delayed the tariffs as negotiations between Washington and Beijing were progressing.

In other words, it is nearly ready to charge nearly all goods imported from China.

"We think this is a very serious issue and we can not easily change our minds", he said.

"Therefore, we think it unnecessary to make an overreaction to it". The president didn't give details on how that will work.

Analysts at the Oxford Economics consultancy say the likely cost of the tariff rises - arising from lost Chinese demand for USA goods due to retaliatory measures and extra expense for U.S. consumers - would rebound on the USA and hurt key states and industries, rippling out to the rest of the world. These would apply to the approximately $300 billion of Chinese goods not now subject to a 25 percent tariff. "Those requests have made the negotiations more hard", the paper said.

Chinese media reported that the next round of talks will likely take place in Beijing, while US Treasury Secretary Mnuchin said that no further trade talks are planned between the two sides "as for now".

One of those is over tariffs, Liu said, according to a transcript of the Q&A published by Phoenix, a Hong Kong-based television station that is close to Beijing.

Georgetown University's Charles Skuba, a former worldwide trade official under President George W. Bush, says President Trump is playing hardball with China, and Skuba says China has not played by the rules.

It's unclear when the two countries will resume talks.

The deal needs "a number" of changes, she said, including stronger protections for labour and the environment.

"Every nation has its dignity, so the text ought to be balanced", Liu said.

Meanwhile, the recent round of US-Chinese trade talks concluded Friday without any agreement, but the sides have agreed to meet for the next round of negotiations in Beijing.

Liu denied the accusations of China's reneging on promises, saying China thought it was normal to make changes before a final deal.

Bo Zhuang and Eleanor Olcott, economists at the consultancy TS Lombard, say the costly implications for both sides of a prolonged fight means a deal is still likely.

The US leader continues to argue that tariffs could in some ways be preferable to reaching a trade deal.

Most analysts believe there would be a high cost to both sides from higher tariffs, though the impact on the global economy might be cumulative as economies in Europe and the U.S. lose momentum.

Kind said the president's one-on-one trade war approach is making it easier for China to hurt Wisconsinites.

"Although there will be some pressure, I believe China's economy will continue to develop smoothly, healthily, in a good state", he said.

Last July, Trump began gradually imposing tariffs on Chinese imports.



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