China snubs United States talks as tariffs swing broadside

Frederick Owens
September 24, 2018

Earlier, the Trump administration said it needs to confront China over its trading practices to defend US long-term interests even as the escalation risks causing pain for American consumers.

The two countries already exchanged tariffs on $50bn worth of each other's goods earlier this year.

Chinese officials canceled the planned negotiations after Trump announced he would impose new levies of up to 10 per cent on another $200 billion in Chinese imports, effective Monday. Meanwhile, $US110 billion of goods from the US will become subject to Chinese retaliatory tariffs around the same time.

Economists warn that a protracted dispute will eventually stunt growth across the globe.

Several rounds of Sino-U.S. trade talks in recent months have yielded no major breakthroughs and attempts at arranging another meeting in coming weeks have fallen through.

"Protectionist US trade policies have now reached the point where they are materially affecting what remains a strong global growth outlook", Fitch said in a report Friday.

The trade tensions have also cast a pall over broader relations between Beijing and Washington, with the two sides butting heads on a growing number of issues.

This week the USA sanctioned a Chinese military procurement organisation, drawing a sharp protest from Beijing and a decision to postpone planned military talks.

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But Mr Trump warned he could ramp up to "phase three", slapping tariffs on approximately US$267 billion of additional imports, or the entirety of the goods the United States buys from China.

Rob Carnell, chief Asia economist at ING, said in a note to clients that in the absence of any incentives Beijing would likely hold off on any further negotiations for now.

China outlined a matching bump in tariff rates for the targeted $60 billion of goods, but it is running out of targets to even the score on Trump´s threatened third tariff wave.

"The US-China trade war has no clear end in sight".

On Sunday, in a bid to promote a business-friendly image, Chinese Premier Li Keqiang said the country would cut import and export costs for foreign firms.

Instead, it has warned of "qualitative" measures to retaliate.

It leaves Beijing hitting $110 billion worth of USA goods, almost everything China buys from the United States. The Trump administration has also called on China to allow USA companies greater access to Chinese markets and to cut its US trade surplus.

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