United States imposes increased tariffs on Chinese goods, despite talks

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Months of increasing comity and optimism in trade talks appeared to go up in smoke this week as American officials accused China of a wholesale retreat from previously agreed commitments - a claim Beijing strongly rejected.

A barge pushes a container ship to the dockyard in Qingdao in eastern China's Shandong province.

Furthermore, US President Donald Trump said that paperwork had been initiated to impose 25 per cent tariffs on a further $US325 billion worth of Chinese goods.

The two countries have been ratcheting up tariffs in an ongoing trade war stretching back over a year, a conflict that has spilled over into seemingly unrelated matters like the detention of Huawei CFO Meng Wanzhou on charges of violating USA sanctions against Iran and ongoing allegations from United States intelligence that Huawei and other Chinese telecoms are being used to spy on unsuspecting customers on behalf of the government.

US President Donald Trump said he expected "a very strong day" at the negotiating table with China.

Reuters on Wednesday revealed the extent of the deep rift between China and the United States, reporting that a draft trade agreement text sent by Beijing on Friday night was riddled with reversals that undermined core US demands.

Imposing new tariffs on China as President Donald Trump has suggested would hurt US businesses and keep companies like Ohio's Cleveland Whiskey from exporting their products to other countries and hiring more workers, business groups fighting the tariffs told reporters on Thursday.

Lighthizer and Mnuchin met the Chinese delegation for about 90 minutes on Thursday evening.

China says it "deeply regrets" the move and will have to take "necessary counter-measures".

"We were getting very close to a deal and then they started to renegotiate the deal", he told reporters at the White House. "When they look at the import-export numbers they were shocked", Trump said on Thursday.

It comes as high-level officials from both sides are attempting to salvage a trade deal in Washington.

"It's possible to do it", Trump said.

US President Donald Trump said on he had received "a handsome letter" from Chinese President Xi Jinping and may speak to him by phone.

However, he also said he would be equally satisfied to simply keep tariffs in place.

The Chinese government has threatened to retaliate if tariffs are raised tonight.

The International Monetary Fund said the row poses a "threat to the global economy".

The implication is that the consequences of a full-blown trade war could be nasty for world capital markets.

Liu said on his arrival in Washington that the prospects for the talks were "promising", but warned that raising tariffs would be "harmful to both sides", and called instead for cooperation.

Punitive duties on a vast array of Chinese-made goods, from electrical equipment to machinery to seafood to furniture, will jump to 25pc at midnight Thursday (0400 GMT Friday).

Intel, Apple, Boeing and Caterpillar were among the hardest hit Dow stocks due to their exposure to the Chinese economy.

Chinese producers of the impacted goods this week said the abrupt tariff hike had wreaked havoc on operations and would bring high costs, layoffs and further shifts of production to Southeast Asia.

That could effectively provide a grace period for the sides to avert serious escalation.

The previous set of tariffs of 10% on $200bn of Chinese goods have to some extent been absorbed by American importers, but economists say a 25% tariff will be much harder for them to stomach.

Taiwan, the United States and China have also been stuck in a longstanding divide over the controversial and rich South China Sea.

The world's two largest economies have been embroiled in a tit-for-tat tariff war since July 2018 over U.S. demands that the Asian powerhouse adopt policy changes that would, among other things, better protect American intellectual property and make China's market more accessible to U.S. companies.

"Now as US-China trade tensions seem to be escalating again, it is the bond and the equity market doing the adjustment work while the safe haven bid for the United States dollars has remained muted". The America Soybean Association has already urged the president to reach a trade deal with China as the ongoing escalations and uncertainties are "unacceptable" to USA farmers. I continue to believe that the U.S. and China will strike a deal. The key sticking point in talks right now is that China can't see eye-to-eye with the U.S. on more structural issues, as highlighted here earlier in the week.

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