WASHINGTON, May 7 (NNN-AGENCIES) — US President Donald Trump has effectively ended a six-month trade truce with China, with top US officials accusing Beijing of backtracking ahead of a key round of negotiations this week.
Tariffs on $200 billion in Chinese merchandise will more than double to 25 percent at 12:01 am Friday, US Trade Representative Robert Lighthizer announced, according to media reports.
The announcement shattered the calm of recent weeks. Trump’s top trade negotiators said Monday the world’s two largest economies were close to an agreement but Beijing reversed course in recent days.
The threat also tanked stock markets worldwide and frightened US farmers and businesses caught in the crossfire who have been banking on a resolution to the year-long conflict that has engulfed $360 billion in two-way trade.
Prior to the announcement, US markets had recovered as investors apparently decided Trump was using tariff threats made Sunday a negotiating tactic.
“Over the course of the last week or so, we’ve seen an erosion in commitments by China, I would say retreating from commitments that have already been made in our judgment,” Lighthizer was quoted as saying Monday.
Treasury Secretary Steven Mnuchin said the negotiations were 90 percent complete but he told reporters that in recent days the talks went “substantially backward,” according to the reports.
Trump had lashed out on Sunday, vowing not only to ratchet up existing tariffs this week but also to extend the 25 percent punitive duties to the remaining $350 billion in Chinese goods imported into the country each year.
“The Trade Deal with China continues but too slowly as they attempt to renegotiate. No!” Trump wrote on Twitter.
Despite the tweeted threats, officials in Beijing had said earlier Monday the talks would continue this week.
Vice Premier Liu He was expected to lead the delegation but the US officials said they had had no contact with him for the prior 24 hours.
Comments from officials in recent weeks indicated the sides were making progress towards an agreement aimed at addressing longstanding concerns about the forced transfer or outright theft of American technology, as well as reducing the US trade deficit with China.
Trump has continued to equate the US trade deficit as a loss or as payments to trading partners and tariffs as payments from the offending country to the United States. But economists stress that it is American businesses and consumers who pay the tariffs and are hurt by higher prices.
US manufacturers and farmers were becoming more optimistic amid signs of progress and comments from officials that the talks were entering their final phase, reinforced by reports Beijing was sending 100 officials to this week’s negotiations. — NNN-AGENCIES