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US-China talks break up after US raises tariffs

US-China talks break up after US raises tariffs

May 11th, 2019 in Business

Protesters shout as the motorcade carrying Chinese Vice Premier Liu He and his delegation depart the Office of the United States Trade Representative in Washington, Friday, May 10, 2019, following trade talks between the United States and China. (AP Photo/Andrew Harnik)

WASHINGTON (AP) — Trade talks between the U.S. and China broke up Friday with no agreement, hours after President Donald Trump more than doubled tariffs on $200 billion in Chinese imports.

Trump asserted on Twitter there was “no need to rush” to get a deal between the world’s two biggest economies and later added the tariffs “may or may not be removed depending on what happens with respect to future negotiations.”

A White House official, speaking on condition of anonymity because they were not authorized to speak publicly on the matter, confirmed the talks had concluded for the day but could not say when they would resume.

Hours earlier, the Trump administration hiked tariffs on $200 billion worth of Chinese imports to 25 percent from 10 percent, escalating tensions between Beijing and Washington. China’s Commerce Ministry vowed to impose “necessary countermeasures” but gave no details.

The tariff increase went ahead even after American and Chinese negotiators briefly met in Washington on Thursday and again Friday, seeking to end a dispute that has disrupted billions of dollars in trade and shaken global financial markets. After a short session Friday, the lead Chinese negotiator, Vice Premier Liu He, left the Office of the U.S. Trade Representative about midday. U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin shook hands with Liu as he left.

In the afternoon, a motorcade of sport-utility vehicles and a police escort, both with lights flashing, carried the Chinese delegation away from their lodgings at the Willard hotel and out of town.

Hu Xijin, editor-in-chief of the Chinese newspaper Global Times, citing “an authoritative source,” tweeted “talks didn’t break down. Both sides think that the talks are constructive and will continue consultations. The two sides agree to meet again in Beijing in the future.”

On Wall Street, stocks fell initially Friday but turned positive on optimism over future talks.

Earlier, Trump asserted in a tweet his tariffs “will bring in FAR MORE wealth to our Country than even a phenomenal deal of the traditional kind. Also, much easier & quicker to do.”

In fact, tariffs are taxes paid by U.S. importers and often passed along to consumers and companies that rely on imported components.

American officials accuse Beijing of backtracking on commitments made in earlier rounds of negotiations. “China deeply regrets that it will have to take necessary countermeasures,” a Commerce Ministry statement said.

U.S. business groups 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.

The latest increase extends 25 percent duties to a total of $250 billion of Chinese imports, including $50 billion worth that were already being taxed at 25%. Trump has said he is planning to expand penalties to all Chinese goods shipped to the United States.

Beijing retaliated for previous tariff hikes by raising duties on $110 billion of American imports. But regulators are running out of U.S. goods for penalties due to the lopsided trade balance.

Ford spokeswoman Rachel McCleery said the carmaker is most concerned about any retaliatory tariffs China might impose.

The Dearborn, Michigan-based company said 80 percent of the vehicles it assembles in the U.S. are sold domestically, but it does export some vehicles to China.

“While most of the vehicles we sell in China are built in China, Ford does export a number of vehicles to China from the U.S.,” McCleery said. “Our biggest concerns are impacts retaliatory tariffs would have on our exports and our expanding customer base in China.”