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More tariff looms over US-China trade talks

14 May 2019

What has replaced those playbooks now that U.S. President Donald Trump has made good on his Twitter threats to boost tariffs on $200 billion of imports from China?

It's certainly possible in principle that the exporter - in this case Chinese enterprises - could "pay" by having to accept a lower price for good, so that the total cost to the importer was unchanged.

Since previous year the United States and China have exchanged tariffs on more than $360 billion in two-way trade, gutting U.S. agricultural exports to China and weighing on both countries' manufacturing sectors.

New American taxes on Chinese goods started this morning.

"Now the thesis is that, based on what we're seeing right now, it seems as though China has backed out of a deal and why that's significant is that this isn't just something that can be fixed by a tweet - he just can't untweet that", Caron said. Meanwhile, US Customs and Border Protection imposed a 25% duty on more than 5,700 categories of products leaving China after 12:01 am on Friday.

While Republicans from farm states are warning about the impact of tariffs on agriculture, some Democrats, such as the party's Senate leader, Chuck Schumer, are urging Trump to "hang tough" in negotiations with China.

Trump's tariffs and who they target European automakers next?

China's Vice Premier Liu He has named three conditions for ending the trade war with the United States. Kudlow also said that President Trump's plan to raise USA tariffs on Chinese goods across the board could take months to take effect.

According to diplomats, Germany, whose exports of cars and parts to the United States are more than half the European Union total, wants to press ahead with talks to ward off tariffs on automakers Volkswagen, Mercedes and BMW. That was the outcome of the latest round of trade negotiations between China and the United States in Washington.

Representative Dan Kildee of MI said that after speaking with U.S. Trade Representative Robert Lighthizer on Thursday he's "pleasantly surprised" Trump isn't settling for Chinese offers to buy more American soybeans and other goods without making structural changes in its economy.

"Many American opinion makers are starting to see China as a rising power seeking to unfairly undercut America's economic prosperity, threaten its security, and challenge its values", the Asia Society declared, "while their Chinese counterparts are starting to see the United States as a declining power seeking to prolong its dominance by unfairly containing China's rise".

Hours later, remarks from US President Donald Trump and US Secretary of the Treasury Steven Mnuchin gave investors reason for optimism.

Mr Liu said the remaining differences were crucial ones "and we will make no concessions on matters of principle".

The talks will continue, but so will the tariffs.

Republican-leaning business groups such as the U.S. Chamber of Commerce have warned that the tariffs threaten to derail the economy raise unemployment, but with economic growth at 3.2 percent last quarter and the unemployment rate at 3.6 percent, Trump isn't changing strategy now.

One estimate from Oxford Economics concluded that Chinese retaliation on this latest round of tariff increases could cost the US economy $62 billion, or $490 per household, in economic output.

The two-day talks in Washington to eliminate the stalemate in the trade between the U.S. and China have ended without any agreement.

The president argued that Americans could become more reliant on the country's farmers. He is heading back to Beijing where officials from both sides expect to hold more talks in the near future. Rather he said the administration had begun "the process prior to a final decision on these tariffs". After Xi took office, Beijing announced an initiative called Made in China 2025 created to make Chinese companies world leaders in advanced fields like robotics and artificial intelligence. On Friday, a fresh 15 percent hike on $200 billion worth of Chinese products came into effect.

More tariff looms over US-China trade talks