Published: Sat, May 11, 2019
Markets | By Otis Pena

China trade talks will continue, but so will the tariffs

China trade talks will continue, but so will the tariffs

The Trump administration raised duties on $200 billion of Chinese imports from 10 per cent to 25 per cent.

Economists at Nomura note that gross domestic product this year could take a hit of as much as 0.4% if Trump expands the taxes to all Chinese imports as business confidence slumped and financial conditions tightened.

In 2018, the USA administration said it would deliver as much as $12 billion to farmers after Beijing slapped retaliatory tariffs on US agricultural products.

"Tariffs will bring in FAR MORE wealth to our Country than even a phenomenal deal of the traditional kind", he said.

Mr Green expected China to increase non-tariff barriers on USA companies, such as delaying regulatory approvals, as it couldn't hit the same amount of imported USA goods with higher tariffs. Perdue also said he was in Japan for trade discussions with the fourth-largest consumer of USA agricultural products.

The increasing tensions worry investors around the world.

Trump has supported protectionist policies as part of his "America First" program.

The Chinese delegation was seen arriving at the Office of the US Trade Representative at around 5 pm on Thursday US time and left about an hour and half later.

The move came after discussions between President Xi Jinping's top trade envoy and his USA counterparts in Washington made little progress on Thursday, with the mood around them downbeat, according to people familiar with the talks.

American officials have claimed that Beijing backtracked on commitments made in earlier rounds of negotiations, leaving them no option but to levy the tariffs.

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Following the US tariff hike, China's Commerce Ministry said it would take countermeasures but did not elaborate.

"The sides have agreed to further meet in Beijing and continue their consultations", Liu said on Friday after the two-day talks in Washington, DC. "Why retaliate? All we need to do is boycotting U.S. products", one internet user said on Sina Weibo.

The EU imposed import duties of 25% on a $2.8 billion range of imports from the United States in retaliation for USA tariffs on European steel and aluminum.

"NO ONE WINS A TRADE WAR", trade analyst Chad Bown of the Peterson Institute for International Economics said on Twitter.

"There is no greater threat to world growth", French Finance Minister Bruno Le Maire said. "All of them are uniform in their assessment that these tariffs are hurting them and its making it more hard for them to stay in business".

They will nearly certainly have to pass on that cost to American consumers - and that means higher prices.

"The narrowing of the power gap between the US and China will embolden Beijing to be more assertive in defending and advancing its interests".

In a statement, the American Chamber of Commerce in China said it was committed to helping both sides find a "sustainable" solution. China is not writing a check to the U.S. Treasury. They were not expected to go into effect for several months. It bought $9.3 billion in US agricultural products a year ago.

The Reuters News Agency reported this story. George Grow was the editor.

A spokesperson directed us to a tweet from USDA Secretary Sonny Perdue where he wrote, "In Japan for ag discussions with our 4th largest ag customer".

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