Published: Mon, May 06, 2019
Finance | By Loren Pratt

China considering cancelling trade talks with US

China considering cancelling trade talks with US

By the end of previous year, the study found, they were paying $3 billion a month in higher taxes and absorbing $1.4 billion a month in lost efficiency.

"We hope the United States will join efforts with China and we can meet each other halfway so we make a mutually beneficial agreement on the basis of win-win and mutual respect", Geng said.

The two governments have raised tariffs on tens of billions of dollars of each other's goods in their dispute over US complaints about Chinese technology ambitions.

That has disrupted trade in goods from soybeans to medical equipment.

Apparently catching Beijing by surprise, Trump said he would raise import taxes on $200 billion in Chinese products to 25% from 10%.

The Chinese have retaliated by targeting $110 billion in USA imports.

Trump added that an additional $325 billion worth of Chinese goods-the remainder of the total value of Chinese imports into the country-which now don't have duties, will have 25 percent tariffs imposed on them "shortly".

The Chinese have retaliated by targeting $US110 billion in American imports. "Sorry, we're not going to be doing that anymore!"

That knocked sentiment immediately in Asia, where the Shanghai Composite index closed 5.6 per cent lower at 2,906.46 after plunging more than six per cent earlier in the session. The future for the Dow Jones Industrial Average lost 1.5 percent while Tokyo's Nikkei 225 retreated 0.2 percent.

"For the market, if talks continue despite an increase in tariffs, the market can absorb the delay, but a shutdown in negotiations would be a clear market negative", said Quincy Krosby, chief market strategist at Prudential Financial Inc. The president has continually said America is getting the short end of the stick when it comes to our trade agreements with China. But Trump and his Chinese counterpart Xi Jinping agreed a truce in December, helping fan a surge across world stock markets for the past four months.

The Trump administration in July began imposing taxes on Chinese goods to pressure Beijing into changing its policies. They say those violate the communist government's market-opening commitments. "Bottom line is President Trump wants to get a deal done and soon, so we wouldn't see these comments as a legitimate concern for investors at this point".

The latest quarter's growth held steady despite a slump in exports to the United States.

While Trump's tweets could suggest trade talks have hit a brick wall, analysts said the threat likely represents a shift in negotiating strategy. China is considering delaying a trip to Washington by its top trade negotiators after Trump threatened the country with steeper tariffs, according to people familiar with the matter. China shd have been expecting the Trump threat in final stages, could have compromise in back pocket ready.

FILE PHOTO: U.S. President Donald Trump answers a question during an Oval Office meeting with Slovakia's Prime Minister Peter Pellegrini at the White House in Washington, U.S. May 3, 2019.

Both the U.S. and worldwide firms have said they are being harmed by the trade war.

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