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Trade War Escalates: Trump Orders Tariff Hikes on All Imports From China

PTI |
Tariffs are the starting point of bilateral trade disputes. If a deal is to be reached, tariffs should all be eliminated, Chinese Vice Premier Liu He said.
Liu He, China's vice premier, left, shakes hands with Robert Lighthizer, right, on leaving the US trade representative's office on Friday following the latest round of trade talks

Image courtesy: Financial Times

Washington/Beijing: US President Donald Trump ordered a tariff hike on almost all imports from China after the latest round of talks to end the trade war between the world's two largest economies ended on Friday without a deal even as Beijing said the negotiations have not broken down and it is cautiously optimistic to reach an agreement.

Expected to further escalate the trade war between the US and China, Trump's latest move came less than a day after he ramped up punitive duties on $200 billion worth of Chinese imports, raising them to 25% from 10%, and Beijing vowed to retaliate.

 The new increase applies to an even greater value of goods – put at about $300 billion.

US Trade Representative Robert Lighthizer said in a statement that Trump had "ordered us to begin the process of raising tariffs on essentially all remaining imports from China."

"Earlier today, at the direction of the President, the United States increased the level of tariffs from 10% to 25% on approximately %200 billion worth of Chinese imports," Lighthizer said.

"The President also ordered us to begin the process of raising tariffs on essentially all remaining imports from China, which are valued at approximately $300 billion," he said.

The process for public notice and comment will be published shortly in the Federal Register.

"The details will be on the USTR website on Monday as we begin the process prior to a final decision on these tariffs," Lighthizer said.

The latest Trump move came as China's top trade negotiator, Vice Premier Liu He, on Friday concluded two days of trade talks with the US team led by Lighthizer.

The 11th round of talks in Washington ended Friday with no deal, but the Chinese vice premier said the negotiations have not broken down.

"Negotiations have not broken down. Quite the opposite. I think they are normal. Small setbacks are inevitable in bilateral negotiations. Looking ahead, we are cautiously optimistic about the future,” the Hong Kong based South China Morning Post quoted him as saying.

"Both sides agree they will meet again in Beijing in the future and keep pushing forward the negotiations," he said without giving a date.

In a series of tweets, Trump described the talks as candid and constructive, but indicated taking a tough approach against massive imbalance of trade with China.

"Over the course of the past two days, the United States and China have held candid and constructive conversations on the status of the trade relationship between both countries," Trump said, praising his relationship with Chinese President Xi Jinping and saying the negotiations would carry on.

"In the meantime, the US has imposed tariffs on China, which may or may not be removed depending on what happens with respect to future negotiations!" Trump said.

He said tariffs will bring in "far more" wealth to the US than even a phenomenal deal of the traditional kind.

Trump said he is in no rush to conclude trade talks with China.

In a transcript of the press interview published on the website of Phoenix Television, a Hong Kong-based broadcaster, Chinese Vice President Liu said there were several issues on which the two sides still disagreed.

“China believes tariffs are the starting point of the bilateral trade disputes. If a deal is to be reached, the tariffs should all be eliminated. This is the first point,” Liu said.

The second is related China's promise to buy more goods from the US, he said.

"While an initial deal was reached when Chinese President Xi and US President Trump met in Argentina in December, the two sides now held different views on what had actually been agreed," Liu said.

“This is a very serious issue,” he said, adding that the deal had to be both balanced and fair.

"It was a matter of principle that the two sides were not only cooperative but also respectful of one another," Liu said.

Liu said that the trade negotiators on both sides of the table had shown they were sincere in their efforts to tackle problems and resolve differences, but reaching a deal was not a short or easy process.

Chinese state media on Saturday took a defiant stance on Washington's latest efforts to increase the pressure on Beijing.

“China requires that all tariffs be eliminated to restore normal bilateral trade,” People's Daily, the mouthpiece of the Communist Party, said in a commentary.

“The trade procurement figures should be realistic, the text must be balanced and expressed in a way that is acceptable to the Chinese people and does not undermine the country's sovereignty and dignity,” it said.

Trump is demanding China to reduce the massive trade deficit which last year climbed to over $539 billion. He is also pressing for verifiable measures for protection of intellectual property rights, technology transfer and more access to American goods to Chinese markets.

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