Trump’s tariff threat leaves Beijing stalling on next talks

Bloomberg

Talks between the US and China to resolve their year-long trade standoff appeared to be on life-support on Monday, with Beijing struggling to respond to tweets by President Donald Trump that threaten an escalation of tariffs by the end of the week.
China’s foreign ministry said that officials were still planning to travel to the US for the next round of talks — but was unable to confirm when amid signs that a delay is now being considered. Meanwhile, a media blackout on Trump’s threat left investors baffled as stocks and the yuan tumbled on rumours that the trade war is now back on.
“We are now trying to get more information on the
relevant situation,” ministry spokesman Geng Shuang told a briefing in Beijing. “What I can tell you is that the Chinese team is preparing to travel to the US for trade talks.”
Trump raised pressure on Beijing to strike a trade deal by announcing he would increase tariffs on $200 billion of Chinese imports to 25 percent from 10 percent. He also floated the possibility of extending a new 25 percent duty on another $325 billion of imports not already covered.
Trump continued tweeting on the trade situation on Monday. “The United States has been losing, for many years, 600 to 800 Billion Dollars a year on Trade. With China we lose 500 Billion Dollars. Sorry, we’re not going to be doing that anymore!” he wrote.
“Risks of a full blown trade war are escalating,” Chua Hak Bin, a senior economist at Maybank Kim Eng Research Pte in Singapore, said before the ministry’s announcement. “Trump’s threat may backfire as China will not want to negotiate with a gun pointing at their heads.”
Global equities tumbled and Treasury futures climbed on the news. The yuan slumped alongside crude oil.
China was considering delaying a US trip this week by a trade delegation led by Vice Premier Liu He after Trump’s tariff threat, according people familiar with the matter. Liu and about 100 other officials
had been scheduled to arrive on Wednesday for what was shaping up to be the final round of negotiations.
It was unclear whether the threat reflected deeper concerns by Trump, who stunned North Korean leader Kim Jong-un by walking away from their nuclear summit in February, or a negotiating tactic. The US had been targeting May 10 to announce a deal, that would be finalised and signed by Trump and Chinese President Xi Jinping later at an official summit, people familiar with the negotiations said.
The two sides have been locked in intense negotiations since last year for an agreement to address US concerns over China’s trade surplus, alleged theft of intellectual property and forced technology transfers. Trump and Xi agreed to a tariff truce on December 1 to allow senior officials time to negotiate.
The truce helped soothe investors concerns about a further escalation in a trade war between the world’s two largest economies, which imposed tariffs on about $360 billion of each other’s good last year. Trump’s latest tweets mark an abrupt reversal in stance for the White House after both sides had been saying for weeks that negotiations were going well.
That shift reflects growing
US frustration with China’s backpedaling on some of its earlier commitments, including on the crucial matter of technology transfer, two people familiar with the situation said.