China says U.S. trade talks now 'impossible'

Hannah Rogers
April 10, 2018

Amid rising concerns about a possible trade war between the U.S. and China, President Donald Trump suggested that Beijing will ease "because it is the right thing to do" and that the economic superpowers can settle the disputes that have rattled financial markets, consumers and businesses.

"China's illicit trade practices - ignored for years by Washington - have destroyed thousands of American factories and millions of American jobs", Trump said in a statement announcing the decision.

The tit-for-tat tariffs between the world's two largest economies follows a USA finding that China was engaging in unfair trade practices in connection with intellectual property protections. "Great future for both countries!"

He added that he and China's President Xi Jinping "will always be friends, no matter what happens with our dispute on trade".

China in recent days has pledged retaliatory tariffs that would hit politically sensitive USA regions and vowed to fight "to the end, and at any cost".

Xi set out his defence of globalisation at the real World Economic Forum in Davos past year (2017) just days before Trump took office promising to protect the USA from "other countries making our products, stealing our companies, and destroying our jobs".

On Tuesday, Washington unveiled some $50 billion worth of proposed tariffs on Chinese imports and on Thursday Mr Trump upped the ante, directing U.S. trade officials to identify tariffs on another $100bn of Chinese imports.

China retaliated by unveiling planned levies on $50 billion worth of major United States exports including soybeans, cars and small aircraft.

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Trump hit back again late Thursday, instructing trade officials to consider the additional levies on $100 billion in imports. Trump, in a tweet Friday, blasted the World Trade Organization, an arbiter of trade disputes, for allegedly favoring China, claiming the organization gives the Asian superpower "tremendous perks and advantages, especially over the U.S".

So far, only the tariffs on steel and aluminum have taken effect. They calmed down Wednesday and Thursday on hopes the USA and China would find a diplomatic solution but slid Friday after Beijing said it would fight the Trump administration's latest threats.

"This is a just a proposed idea which will be vetted by" the US Trade Representative, Kudlow told reporters at the White House.

"But in this process tariffs have to be part of it, there's no two ways about it".

Another adviser, Peter Navarro, told NBC's "Meet the Press" that while "there are discussions" with the Chinese, the U.S. is moving forward on tariffs and investment restrictions against Beijing. Rather than waiting weeks for the USA tariffs to be implemented, Trump backed a plan by Robert Lighthizer, his trade representative, and was encouraged by Navarro to seek the enhanced tariffs. "But thankfully, we have a president that's willing to actually stand up, be tough, and take some really courageous and bold action, like President Trump has done", she said.

US Treasury Secretary Steven Mnuchin said on the CBS there was a risk of a trade war between the United States and China but that he did not expect one.

The president made fixing the trade imbalance with China a centerpiece of his presidential campaign, where he frequently used incendiary language to describe how Beijing would "rape" the United States economically.

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