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Donald Trump vows to raise China tariffs, sending markets tumbling

07 May 2019

China is considering to cancel the high-level trade talks with the USA, multiple media reports have said, hours after President Donald Trump threatened to impose more punishing tariffs on United States dollars 200 billion worth of Chinese products.

Global financial markets have been sent into a tailspin after Donald Trump risked jeopardising delicate trade talks with China by unexpectedly saying he would raise tariffs further on Chinese goods this week.

"For 10 months, China has been paying Tariffs to the U.S. of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods", Trump tweeted.

Trump's comments in tweets came as a Chinese delegation was due to resume talks in Washington aimed at resolving a tariffs battle that has rattled world markets.

"President Trump set the tone for the week, expressing dissatisfaction at the pace of China trade negotiations amid Beijing's attempt to renegotiate", Rodrigo Catril, a senior foreign-exchange strategist at National Australia Bank, wrote in a morning note.

But Michael Pillsbury, an informal trade adviser to Mr Trump, said he took the president's tweet "at face value".

Liu's trip and meeting with United States officials will most likely be more of a message deliverance rather than a detailed discussion so don't expect trade talks to suddenly advance on the back of this week's session.

The president of DIHK, Germany's chambers of commerce, told regional paper Augsburger Allgemeine the tariff threats were "not good at all" for Germany's economy.

Beijing hit back with duties on $110bn of United States goods, blaming the United States for starting "the largest trade war in economic history". That's emboldened trade hawks within the Trump administration to push for a harder line, including the raising of tariffs, the people said. With China, we lose 500 Billion Dollars.

Palestinian Baby Dead, Pregnant Mother Hurt In Israeli Strike
This came after four Palestinians were killed and 51 injured in clashes with Israeli forces along the border fence on Friday. Israel and Egypt have imposed a blockade on Gaza for over a decade, citing security reasons.

Last week, the mood among gold investors turned gloomy, pushing the metal to a four-month low after the U.S. Federal Reserve Chairman Jerome Powell dashed hopes of a rate cut this year.

Media reported, citing sources, that China was mulling over the possibility of scraping the next round of talks after Trump's statement.

Besides a greater opening of the Chinese market to U.S. goods, Trump is pressing for structural changes such as Beijing ending its practice of forcing USA companies that operate in China to share their technology.

The Shanghai Composite index closed 5.6 per cent lower at 2,906.46 after plunging more than 6 per cent earlier in the session. Let Trump raise tariffs.

A breakthrough in the trade talks could restore normality, he said.

That follows talks in April in Beijing that US Treasury Secretary Steven Mnuchin called "productive".

"The president is, I think, issuing a warning here, that, you know, we bent over backwards earlier, we suspended the 25 percent tariff to 10 [percent] and then we've left it there".

While the two sides had been reporting progress in talks, the sticking points have been on intellectual property theft and forced technology transfers. China wants the tariffs to be removed, while Trump wants to keep some, if not all, of them as part of any final deal to ensure China lives up to its commitments, a White House official said on Sunday.

Donald Trump vows to raise China tariffs, sending markets tumbling