U.S. President Donald Trump waves during joint statements with China's President Xi Jinping at the Great Hall of the People in Beijing, China - Reuters
PANAMA CITY, Fla./WASHINGTON (Reuters): US President Donald Trump said on Wednesday that China “broke the deal” it had reached in trade talks with the United States, and vowed not to back down on imposing new tariffs on Chinese imports unless Beijing “stops cheating our workers.”
The US Trade Representative’s office announced that tariffs on $ 200 billion worth of Chinese goods would increase to 25% from 10% at 12:01 a.m. (0401) GMT on Friday, right in the middle of two days of meetings between Chinese Vice Premier Liu He and Trump’s top trade officials in Washington.
Speaking to supporters at a rally in Florida on Wednesday, Trump accused China of breaking the deal and 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 $ 100 billion a year.”
Trump’s comments fuelled a round of selling in Asian markets
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 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, 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.
Trump, who has embraced largely protectionist policies as part of his “America First” agenda, warned China on Wednesday that it was mistaken if it hoped to delay a trade deal until a Democrat controlled the White House.
“The reason for the China pullback & attempted renegotiation of the Trade Deal is the sincere HOPE that they will be able to ‘negotiate’ with Joe Biden or one of the very weak Democrats,” Trump, a Republican, tweeted on Wednesday.
“Guess what, that’s not going to happen! China has just informed us that they (Vice-Premier) are now coming to the US to make a deal. We’ll see, but I am very happy with over $100 Billion a year in Tariffs filling US coffers,” he added.
In response, Biden’s deputy campaign manager, Kate Bedingfield, criticised Trump, saying on Twitter that US farmers, small-business owners and consumers were the ones hit by the tariff battle.
Speaking to reporters, White House Press Secretary Sarah Sanders said the Trump administration had received an “indication” that China wants an agreement.
US stock indexes rebounded slightly from this week’s earlier losses after her comments, but the S&P 500 and the Nasdaq closed in negative territory amid caution over trade and some disappointing earnings.