USA prepares to raise China trade tariffs


China's apparent reversals prompted Trump's ire, who announced via Twitter on Sunday the dramatic ratcheting up of tariffs, which United States trade representative Robert Lighthizer subsequently confirmed would take effect on Friday.

The White House received a diplomatic cable from Beijing late on Friday night containing systematic edits to the pair's almost 150-page draft trade agreement, threatening to undo months of negotiations between the world's two largest economies.

The US president has vowed to double tariffs on $200bn of Chinese goods on Friday, amid claims Beijing is trying to row back on a trade deal.

President Donald Trump on Sunday sent a tweet saying the USA would raise tariffs on more than $200 billion worth of Chinese goods to 25% from their current level of 10%. Exports to the United States, China's biggest foreign market, were down 13 per cent at $31.4 billion.

"Guess what, that's not going to happen!" he continued.

The Chinese vice premier Liu He is now travelling to the USA for two days of trade talks; with the latest tariff hike scheduled for midnight EDT on Friday, the changes will arrive in the middle of his trip.

The White House now says the higher tariffs, which will jump from 10% to 25% on $200 billion worth of Chinese goods, will begin on Friday.

"There's a lot of feeling in ag country that we're being used as pawns in this whole business", Roberts said, but added: "We will benefit tremendously if we get a good deal, so we're hanging in there with the president".

Those new tariffs will come into force "shortly", Trump said.

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In a second tweet, Trump wrote that China is holding out for a Democrat to defeating him in the 2020 election.

Alongside Secretary of the Treasury Steven Mnuchin, Lightizer accused China of reneging on certain agreement, saying "we have seen an erosion in commitments by China".

However, even though Chinese Vice Premier Liu He will appear in Washington, D.C., for negotiations Thursday and Friday, Beijing still appears to be playing hardball.

Oxford Economics warned that escalating the tariffs to the remaining Chinese goods, which would be expected to spark further retaliation from Beijing, would cut 0.3 percentage points off United States growth.

Trump also threatened on Sunday to levy tariffs on an additional $US325 billion of China's goods, on top of the $US250 billion of its products already hit by import taxes.

Washington has demanded far-reaching and profound changes to the Chinese economy, such as submitting state enterprises to market principles, reducing massive subsidies and ending the alleged "theft" of USA technology.

Traders fear that not only will economic growth suffer, but also that the tariffs will throw a wrench in trade negotiations this week as a Chinese delegation is in Washington to discuss a new agreement. US officials have said Chinese negotiators reneged in the past week on provisions in a draft deal the USA considered settled. China too slapped reciprocal tariffs on some USA exports to the country.

A shorter time frame for this week's trade talks also suggests diminished expectations for the gathering, which had originally been scheduled to last three days, according to Goldman.