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Sunday 12 May 2019 - 06:29
US gives China one-month ultimatum for trade deal
Story Code : 793731
The decision was relayed by people with knowledge of the talks between the two sides on Friday, hours after the Trump administration raised tariffs on $200 billion of Chinese imports from 10 percent to 25.
Even though, the US president hailed the talks with the Chinese delegation as “candid and constructive” in a series of tweets.
“The relationship between President Xi [Jinping] and myself remains a very strong one, and conversations into the future will continue.”
However, in a meeting with Chinese Vice Premier Liu He, US officials laid out their bottom line and informed him that Beijing had three or four weeks to agree to a deal or face additional 25 percent tariffs on a further $325 billion in exports to the US, according to people familiar with the talks.
“For the interest of the people of China, the people of US and the people of the whole world, we will deal with this rationally,” Liu said in an interview with Chinese state broadcaster CCTV on Friday.
“But China is not afraid, nor are the Chinese people. China needs a cooperative agreement with equality and dignity.”
The Chinese vice premier had earlier stated that the prospects for the talks were "promising," but warned that raising tariffs would be "harmful to both sides.”
In several tweets later on Friday, Trump sought to justify his decision to hike tariffs as well as to convince businesses and financial markets that he had no plans to walk away from a deal with China.
The Chinese commerce ministry, however, lamented the US move on Friday and reiterated Beijing’s pledge to take "necessary countermeasures.”
US move 'without any foundation'
Peter Koenig, an economist and geopolitical analyst, described the US decision to hike import tariffs from China as arbitrary and said such an action was "without any foundation."
“As of today, Mr. Trump has arbitrarily increased tariffs on Chinese goods worth about 200 million from 10 to 25 percent. This is an action without any foundation...An action that makes no sense at all,” Koenig said.
He said the tariff hikes were tantamount to "sanctions" and China was likely to treat them as such.
"There are numbers of actions that Chinese can take in retaliation and some of them may be typically the Chinese levy increased duty on imports of the US. They could de facto devalue the yuan versus the dollar and they could actually go further,” he added.
Washington is pressing Beijing to reduce the trade imbalance between the two countries and implement structural changes in its practices concerning intellectual property and the transfer of US technology to Chinese firms.
China, however, says such reforms could only favor the US and lead to more protectionism in global trade.
While Trump portrays the tariffs as punishing China, experts believe American companies and consumers would be bearing the costs.
Even without the trade war, relations between Washington and Beijing have continued to deteriorate, with an uptick in tensions between the two countries over the South China Sea, Taiwan, human rights and China’s plan to re-create the old Silk Road, called the Belt and Road Initiative.
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