US-China Trade Talks Break Up With No Deal In Sight
High stakes trade talks between the United States and China ended Friday with no agreement in sight and mixed signals from the White House in regard to where things stand.
In a pair of tweets sent shortly before the markets closed Friday, President Donald Trump said “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.
“The relationship between President Xi and myself remains a very strong one, and conversations … into the future will continue,” the president said. “In the meantime, the United States has imposed Tariffs on China, which may or may not be removed depending on what happens with respect to future negotiations.”
But within minutes, Treasury Secretary Steven Mnuchin told reporters no future trade talks with China are currently planned.
Early Friday morning, the Trump administration hiked tariffs on $200 billion worth of Chinese imports to 25 percent from 10 percent, escalating tensions between Beijing and Washington.
According to the Cato Institute, despite claims from the administration that the new tariffs will force China to make a deal, the squeeze will be felt most acutely by Americans because tariffs are nothing more than taxes on U.S. consumers, producers and investors.
“Trump likes to remind audiences that he signed into law a tax bill last year that significantly reduced taxes, which he argues gives American households more spending power,” says Cato scholar Daniel J. Ikenson. “His trade war is almost certain to wipe out the benefits of his much ballyhooed tax reform.”
China’s Commerce Ministry immediately announced it would impose “necessary countermeasures” but gave no details.
The latest round of negotiations ended at around noon on Friday. At issue are accusations by American officials that Beijing is backtracking on earlier commitments.
The latest increase in tariffs extends 25 percent duties to a total of $250 billion of Chinese imports, including $50 billion worth that were already taxed at 25 percent.
Trump said earlier this week that he might expand the penalties to all Chinese goods shipped to the United States.
China retaliated for previous tariff hikes by raising duties on $110 billion of American imports.
The increase went ahead even after American and Chinese negotiators briefly met in Washington on Thursday and again on Friday, seeking to end a dispute that has disrupted billions of dollars in trade and repeatedly shaken financial markets.
Stocks rallied late Friday after the president’s tweets. The Dow Jones Industrial Average jumped 150 points, soaring back from a 358-point loss earlier in the session.
The S&P 500 gained a modest 0.6 percent, while the Nasdaq Composite Index rose 0.3 percent.Hu Xijin, editor-in-chief of the Chinese newspaper Global Times, citing “an authoritative source,” tweeted that “talks didn’t break down. Both sides think that the talks are constructive and will continue consultations. The two sides agree to meet again in Beijing in the future.”
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