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  • Aides set up platforms before a group photo with members of U.S. and Chinese trade negotiation delegations in Beijing, China, February 15, 2019.

    Aides set up platforms before a group photo with members of U.S. and Chinese trade negotiation delegations in Beijing, China, February 15, 2019. | Photo: Reuters

Published 5 May 2019

This shift comes ahead of another round of talks between U.S. and Chinese officials in Washington scheduled for Wednesday to end the yearlong tit-for-tat trade war. The move could be a negotiating tactic ahead of a new round of talks this week to pressure China.

United States (U.S.) President Donald Trump tweeted on Sunday that he will hike U.S. tariffs by 25 percent on US$200 billion worth of Chinese goods by Friday and target hundreds of billions more soon, prior to this week’s negotiations between the two countries.

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“The tariffs paid to the U.S. have had little impact on product cost, mostly borne by China. The trade deal with China continues, but too slowly, as they attempt to renegotiate. No!,” said the U.S. President in a sharp change of tone to prior messages, the latest on May 3, when he said negotiations were going “pretty well”.

This shift comes ahead of another round of talks between U.S. and Chinese officials in Washington scheduled for Wednesday to end the yearlong tit-for-tat trade war. The move could be a negotiating tactic ahead of a new round of talks this week to pressure China.

Back in February 2019, the U.S. president decided to delay the increment from 10 to 25 percent trade tariffs on imported Chinese goods, as negotiations and talks with his Chinese counterpart Xi Jinping were underway. Yet with the latest statement, the Chinese delegation could decide not to convene because of what is likely to be seen as an escalation by Trump.

Neither side has raised tariffs since both leaders met in Argentina in November 2018 and agreed to a truce while their teams negotiated an end to the trade war. Tariffs on Chinese goods are paid to the United States by the companies importing the goods; most of those companies are U.S.-based.

Since the start of the Tariff wars, the U.S. has imposed 25 percent tariffs on US$50 billion worth of Chinese technology goods (machinery, autos, intermediate electronic components). While China imposed 25 percent levies on US$50 billion worth of U.S. goods including soybeans, food, whiskey, ethanol, and tariffs of five percent to 10 percent on US$60 billion worth of liquefied natural gas, chemicals, frozen vegetables, and food ingredients.

On Sunday, Trump added that he would also target another US$325 billion of Chinese goods with 25 percent tariffs “shortly” and he suggested that the measures were not leading to price increases for American consumers. 

“Raising tariffs means raising taxes on millions of American families and inviting further retaliation on American farmers,” said Christin Fernandez, a spokeswoman for the Retail Industry Leaders Association.

After the news as financial markets open on Monday, the reaction was negative. The S&P 500 e-minis fell 1.6%, while Dow futures were down 420 points or 1.6%.

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