On May 10th, the US introduced 25% tariffs on $200 billion worth of Chinese goods, which were previously under a 10% tariff.
China immediately expressed its “deep regret” at the US move, through its delegation headed by Vice Premier Liu He, which is currently in Washington to negotiate a trade deal.
“China will have to take necessary countermeasures, said the delegation, which is currently in Washington for the 11th round of China-U.S. high-level economic and trade consultations.
With this round of talks still ongoing, China hopes that the United States can meet China halfway, and that the two sides will make joint efforts to resolve existing problems through cooperation and consultation,” the delegation said.
Prior to the hike in tariffs and the Chinese vow of a response, Liu He upon his arrival told reports that he came to Washington with sincerity, saying that under the current special circumstances he hopes to engage in rational and candid exchanges with the US side.
China believes that raising tariffs is not a solution to the problems, Liu said, noting that it is harmful to China, to the United States and to the whole world.
The talks on May 9th appeared to have been unsuccessful, since the tariffs were imposed.
US President Donald Trump said that preparations would be made to impose 25% tariffs on the remaining $325 billion of Chinese imports.
In the White House, Trump said that he received a “beautiful letter” from Chinese President Xi Jinping following the hike in tariffs.
“He just wrote me a beautiful letter, I just received it, and I’ll probably speak to him by phone, but look, we have two great alternatives, our country is doing fantastically well,” Trump said. “Our alternative is an excellent one, it’s an alternative I’ve spoken about for years. We’ve taken well over $100 billion from China in a year.”
“I like the president a lot,” he said of Xi, saying that they also agreed to talk over telephone.
“He’s a good friend of mine, but I’m representing the USA and he’s representing China, and we’re not going to be taken advantage of anymore.”
Trump further maintains that the increase in tariffs is paid for by China, but most economists say the evidence shows that their cost is being absorbed by American companies and consumers.
According to him, the decision to hike the tariffs was a result of Beijing walking back on a number of fundamental commitments.
“We put the tariffs on, we made the statement, and then they upped the meeting. ‘How about let’s go back to Thursday?’,” Trump said after claiming that the Chinese side suggested a delay in talks until a later date.
“We were getting very close to a deal, then they started to renegotiate the deal,” he said, adding that one of those areas was protection of intellectual property rights.
“So I have no idea what’s going to happen,” Trump added. “I did get last night a very beautiful letter from President Xi [saying] ‘Let’s work together, let’s see if we can get something done.’”
Bloomberg cited Zhu Ning, deputy director of the National Institute of Financial Research at Tsinghua University in Beijing, according to whom the US decision was a big step back.
“There’s definitely disappointment and frustration. We thought we were on a good path of making progress and having a deal.”
The meeting between the Chinese delegation and US officials will continue on May 10th and it is yet to be seen if a deal can be reached. At this point it is unlikely, since the US entirely blames China and undertakes controversial actions, while China is given no choice but to retaliate.
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