China to cancel talks if Trump moves ahead with tariffs, sources say

Randal Sanchez
September 18, 2018

"The Trump administration is yet again sending a perplexing mixed message by inviting Chinese officials for negotiations and then imposing additional tariffs in the run-up to the talks", said Eswar Prasad, former head of the International Monetary Fund's China division.

The taxes will take effect from 24 September, starting at 10 percent and increasing to 25 percent from the start of next year.

The tariffs follow duties on $50 billion in goods imposed earlier this year.

The Chinese government may decline to participate in proposed trade talks if the Trump administration moves forward with additional tariffs, the Wall Street Journal reported on Sunday, citing Chinese officials.

In Beijing, China's Foreign Ministry had already vowed to strike back.

Parker said the Government did not believe the effect of the tariffs on New Zealand - for example from more costly imported goods - would be large "and neither do we think there will be any large benefit to New Zealand".

It would be devastating to the New Zealand economy if it faced increased tariffs on some of its big exports to the U.S., he said.

"We have always stated that negotiations on the basis of equality, honesty and mutual respect represent the only right way out of the current trade issue between China and the United States", said Geng.

US President Donald Trump escalated his trade war with China on Monday, imposing 10% tariffs on about£152.14 billion worth of Chinese imports, but sparing smart watches from Apple and Fitbit and other consumer products such as bicycle helmets and baby auto seats.

"If China decides to cancel new trade talks in response to U.S. trade tariffs action, the United States dollars would likely recover most of its recent losses", CBA's Elias Haddad said.

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And it said North Korea is violating sanctions by transferring coal at sea and flouting an arms embargo and financial sanctions. South Korea suspended operations at the complex in 2016 after North Korea carried out its fourth nuclear test.

Economists at UBS Group AG say even a 10 per cent tariff would slow the US economy in the fourth quarter by enough to stop the Federal Reserve hiking interest rates again in December.

U.S. President Donald Trump said he would announce his latest plan on Chinese commerce after markets closed.

The new taxes will hit a broad swath of products, including billions in Chinese-made voice data receivers, computer memory modules, automatic data processors, and accessories for office equipment such as copiers and bank note dispensers - instantly making widely used goods more expensive.

According to Reuters, smart watches from Apple and Fitbit, as well as some consumer safety products, such as bicycle helmets and baby vehicle seats, are exempt from the new tariffs.

Its the latest move by the administration to punish china for not complying with fair trade practices.

Lower economic growth in China would have spill-over effects to the rest of Asia given that, just as it provides critical links in the supply chains of USA companies, they are also plugged into its supply chain.

Talks between the European Union and Britain on Brexit are being conducted in a spirit of "good cooperation", said Michel Barnier, the EU's chief negotiator on the issue.

Trump's decision is a significant escalation of an already serious trade dispute between the world's two largest economies - one with seemingly no end in sight. Apple Inc. said last month the proposed duties on US$200 billion cover a wide range of products used in its usa operations. "Hopefully, this trade situation will be resolved, in the end, by myself and President Xi of China, for whom I have great respect and affection". Prime Minister Justin Trudeau defended regulations on the country's dairy market, an issue the USA has signaled it will not be quick to budge on.

Officials from both countries have met four times for formal talks, most recently in August, when Treasury's undersecretary for global affairs, David Malpass, led discussions in Washington with Chinese Vice Minister Wang Shouwen.

Many US businesses are critical of the tariffs. But Chinese officials have other ways of making the United States hurt, including by harassing American multinationals with tax audits and customs inspections or even mobilising consumer boycotts against them.

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