Connect with us

Hi, what are you looking for?

Capital Business
Capital Business


Trump ups pressure on China ahead of last ditch trade talks

Washington, United States, May 5 – US President Donald Trump announced Sunday that the United States will raise tariffs on $200 billion of Chinese goods — a blunt warning to Beijing just days before what is being billed as a last-ditch round of talks to reach a deal or resume their trade war.

To press China even more to accept US demands, Trump also threatened again to impose tariffs on all Chinese imports to the US — worth $539.5 billion last year.

China is now considering canceling the next round of talks scheduled to start Wednesday in Washington, The Wall Street Journal reported, citing a person briefed on the matter.

“China shouldn’t negotiate with a gun pointed to its head,” the newspaper quoted the source as saying, adding that a final decision had not been made.

Trump said he is raising some tariffs because the trade talks are going “too slowly.”

“For 10 months, China has been paying Tariffs to the USA of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods,” Trump tweeted.

“The 10% will go up to 25% on Friday.”

Following Trump’s announcement, Hong Kong and Shanghai stocks tumbled in the first few minutes of trade on Monday.

The Hang Seng Index plunged 2.4 percent, the benchmark Shanghai Composite Index dived 3.0 percent and the Shenzhen Composite Index — which tracks stocks on China’s second exchange — sank 3.7 percent.

Advertisement. Scroll to continue reading.

The two sides have imposed tariffs on $360 billion in two-way trade since last year. But Trump and Chinese leader Xi Jinping agreed to a truce in December to refrain from further escalation.

As recently as last week, the US had depicted the trade talks as going well.

“The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!” Trump complained.

Trump says he wants to reduce the huge US trade deficit with China, which in 2018 totaled $378.73 billion with services trade included.

Besides a greater opening of the Chinese market to US goods, Trump is pressing for structural changes such as Beijing ending its practice of forcing US companies that operate in China to share their technology.

Trump is also demanding that China halt intellectual property theft and subsidies to state-owned companies.

The US president has insisted throughout the process that he will not accept a watered-down trade accord. And his administration warned recently that trade talks could not simply go on forever.

– Resumption of trade war? –

The next round of talks — if it takes place at all — could see Trump announcing a summit with President Xi Jinping to sign a trade accord with a potentially historic scope, or the trade war could resume and worsen.

Advertisement. Scroll to continue reading.

For now, the Trump administration insists that the trade war has left the US economy unscathed, unlike the Chinese economy, which last year posted its slowest growth in nearly 20 years.

Trump asserted that so far the tariffs he imposed on Chinese goods “are partially responsible” for the robust US economy, which in the first quarter grew at an annual rate of 3.2 percent.

But many economists are worried about the longer term effects on the US economy.

US Treasury Secretary Steven Mnuchin (L) and his Trade Representative Robert Lighthizer arrive for a group photo session after their meeting with Chinese Vice Premier Liu He in Beijing on May 1 © POOL/AFP / Andy Wong

Some US manufacturers who import Chinese products that are subject to tariffs are already complaining of higher costs. And economists warn that US consumers will end up paying more for everyday items.

China’s lead negotiator, Vice Premier Liu He, and his people are expected to arrive in Washington on Wednesday if the talks go ahead.

So far, the Chinese side in the talks has agreed for China to buy more US products, mainly in the farm and energy sectors.

But one major obstacle to reaching a final deal continues to be a mechanism for enforcing any accord that is agreed upon.

The Trump administration says it has seen promises and commitments ignored in the past, so this time it will not sign a deal unless it features measures that will allow Washington to verify that China is keeping its word.

Beijing is pressing for the US to lift the tariffs it has imposed, which Washington is evidently not willing to do.

Vice President Mike Pence said Friday that Trump is prepared to impose even more tariffs if no deal is reached.

Advertisement. Scroll to continue reading.

“The manner in which tariffs would come off is going to be a part of the enforcement mechanism and all of that is the subject of negotiations as we talk,” Pence told CNBC.

Trump’s chief negotiator, Robert Lighthizer, told the Senate Finance Committee in March that America must keep open the option of raising tariffs on Chinese imports as a way to be sure China complies with the trade deal the two sides are working to complete.

Click to comment

More on Capital Business

Executive Lifestyle

NAIROBI, Kenya, Mar 12 – The country’s super wealthy individuals are increasing their holding of bonds, gold and cash, a new report by Knight...

Ask Kirubi

NAIROBI, Kenya, Mar 9 – Businessman and industrialist Dr. Chris Kirubi has urged members of the public to exercise extreme caution when making any...

Ask Kirubi

NAIROBI, Kenya, Mar 24 – Businessman and industrialist Dr. Chris Kirubi is set to own half of Centum Investment Company PLC, following a go-ahead...

Ask Kirubi

It is without a doubt that the COVID-19 pandemic has caught the whole world by surprise. Although its full impact is yet to be...


NAIROBI, Kenya, Mar 18 – Commercial Banks have been ordered to provide relief to borrowers on their personal loans, with loans eligible from March...


NAIROBI, Kenya, Jun17 – Kenya’s tea leaves manufacturer Kericho Gold, has been awarded the Superbrands Seal by Superbrands East Africa for their quality variety...


NAIROBI, Kenya, Apr 13 – As the local telecommunications industry gears up to roll out 5G networks in the country, the Communications Authority of...


NAIROBI, Kenya, Mar 22 – Airtel Kenya is offering free internet access for students in order to enable continued learning at home in the...