President Donald Trump has accused China of breaking “the deal” it had reached in trade talks with the United States, and promised to impose more tariffs on Chinese goods if no agreement is reached in fresh talks.
The US president’s latest salvo comes as Chinese Vice Premier Liu He – Beijing’s lead negotiator for the trade dispute – and Trump’s top trade officials meet for talks on Thursday and Friday in Washington.
On Wednesday, the US Trade Representative’s office announced that tariffs on $200bn worth of Chinese goods would increase to 25 percent from 10 percent at 12:01am (04:01GMT) on Friday.
Speaking to supporters at a rally in Florida on Wednesday, Trump said that Beijing would pay if no agreement is reached.
“I just announced that we’ll increase tariffs on China and we won’t back down until China stops cheating our workers and stealing our jobs, and that’s what’s going to happen, otherwise we don’t have to do business with them,” Trump told a cheering crowd.
“They broke the deal,” he added.
“They can’t do that. So they’ll be paying. If we don’t make the deal, nothing wrong with taking in more than $100bn a year.”
Trump’s comments triggered a round of selling in Asian markets.
A tit-for-tat tariff war
Beijing has announced it would retaliate if tariffs rise.
“The Chinese side deeply regrets that if the US tariff measures are implemented, China will have to take necessary countermeasures,” China’s Commerce Ministry said on its website, without elaborating.
The world’s two largest economies have been embroiled in a tit-for-tat tariff war since July 2018 over the US demands that the Asian powerhouse adopt policy changes that would, among other things, better protect American intellectual property and make China’s market more accessible to US companies.
Expectations were recently riding high that a deal could be reached, but a deep rift over the language of the proposed agreement opened up last weekend.
Reuters news agency, citing US government and private-sector sources, reported on Wednesday that China had backtracked on almost all aspects of a draft trade agreement, threatening to blow up the negotiations and prompting Trump to order the tariff increase.
Washington is demanding Beijing make sweeping changes to its trade and regulatory practices, including protecting US intellectual property from theft and forced transfers to Chinese firms, curbs on Chinese government subsidies and increased American access to China’s markets.
Trump also has sought massive hikes in Chinese purchases of US farm, energy and manufactured products to shrink a gaping US trade deficit with China.