Published: Tue, May 14, 2019
Finance | By Loren Pratt

China still 'cautiously optimistic' on US trade talks despite new tariffs

China still 'cautiously optimistic' on US trade talks despite new tariffs

On Friday, Trump increased the level of tariffs from 10 percent to 25 percent on about $200 billion worth of Chinese imports.

The retailer would have to pay a $32.50 tariff on the shipment, thereby raising the total price from $500 to $532.50.

"This shows Xi and other senior Chinese leaders are willing to accept an escalation of the trade dispute over what they perceive as a direct and intolerable challenge to China's sovereignty, in the form of United States demands that China make substantial changes to key laws and regulations to formally enshrine China's concessions", they said.

China's Vice Premier Liu He gestures to U.S. Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer outside the office of the U.S. Trade Representative following a morning round of negotiatioons on the second day of last ditch trade talks in Washington, U.S., May 10, 2019.

Trump offered some hope of that scenario on Friday afternoon by announcing - on Twitter, of course - that this week's talks with China were "constructive" and his relationship with Chinese President Xi Jinping remains "a very strong one". "Would be wise for them to act now, but love collecting BIG TARIFFS!" he added.

This news came as leaders of the world's two largest economies ended negotiations Friday without a trade deal in place.

Mr. Trump said in a tweet this week tariffs "will bring in FAR MORE wealth to our Country than even a phenomenal deal of the traditional kind".

According to the news agency PTI, before talks with reporters before leaving for Washington on Friday, Chinese Deputy Prime Minister Liu He said that he was optimistic, but to reach an agreement, the Trump Administration of USA needs to agree to abolish the penal charge (tariff) imposed on billions of dollars of Chinese products.

U.S. business groups have appealed for a settlement that will resolve chronic complaints about Chinese market barriers, subsidies to state companies and a regulatory system they say is rigged against foreign companies. Looking ahead, he said, "I'd argue that we have to believe that the surprises in the market are going to be more toward the downside than the upside".

This week's tariff move is likely to have significant short-term consequences for retailers and other US businesses reliant on imports from China.

Last July, Trump began gradually imposing tariffs on Chinese imports.

Trump said he is in no rush to conclude trade talks with China. And officials have targeted American companies operating in China by slowing customs clearance and stepping up regulatory scrutiny. Further talks are possible, but there's no immediate plan for the next round, according to a person familiar with the negotiations. China's response was sharp contrast: It quickly enacted a massive stimulus campaign that super-charged economic growth and helped pull the entire world economy out of the ditch. The Trump administration was expected to make a decision on the findings of a probe into the national security risks of European auto imports by May 18. Trump, who has adopted protectionist policies as part of his "America First" agenda, said China "broke the deal" by reneging on earlier commitments.

China's Commerce Ministry vowed to impose "necessary countermeasures" but gave no details.

"China clearly requires that the trade procurement figures should be realistic; the text must be balanced and expressed in terms that are acceptable to the Chinese people and do not undermine the sovereignty and dignity of the country", the People's Daily newspaper said in a commentary on Saturday.

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