China says trade envoy preparing to go to US for talks to end tariff war despite Trump's new threat

PTI
Monday, 6 May 2019

"China is considering cancelling trade talks that are to resume in Washington starting Wednesday," The Wall Street Journal reported Sunday quoting unnamed sources.

WASHINGTON/BEIJING: China's top trade envoy is preparing to travel to Washington for crucial talks, a Chinese official said Monday despite US President Donald Trump threatening to impose more punishing taxes on USD 200 billion worth of Chinese products, citing slow progress in negotiations.

The brief statement from Chinese Foreign Ministry Spokesman Geng Shuang came as media reports said Beijing may cancel the high-level trade talks with the US, leading to tumbling of shares prices across the world amid worries that the two major economic giants were once again on the path of confrontation.

Asked whether the top Chinese envoy Vice Premier Liu He would visit Washington as planned, Geng said, "a Chinese team is preparing to travel to the United States for trade talks."

Reacting to the reports, Geng told journalists, "What I can tell you is that the Chinese team is preparing to travel to the US for the trade talks."

He parried a spate of questions whether the talks would be resumed on Wednesday and declined say when the trade team would go to Washington.

About Trump's threat to impose punishing tariffs on USD 200 billion worth of additional Chinese products, Geng played it down saying that such a situation prevailed earlier.

"As to the US threat on Chinese tariffs, I think such situation appeared many times before. China's position is always clear cut and the US knows that clearly. Regarding the trade talks between China and the US those consultations have been held for the 10th round and made positive progress."

President Trump's surprise remarks came on Sunday as the two countries locked in a longstanding trade war seemed near to striking a trade deal.

A high-level Chinese delegation led by Vice Premier Liu was scheduled to be in Washington to resume talks aimed at resolving the trade war that has cast gloom over the world economy.

"China is considering cancelling trade talks that are to resume in Washington starting Wednesday," The Wall Street Journal reported Sunday quoting unnamed sources.

"There has been widespread expectations in recent days that an accord could be reached by Friday," it said.

Quoting an unnamed source, CNBC News said the Chinese Vice Premier will likely cancel the trip he had planned for himself and a 100-person delegation for the final round of talks.

The US officials had previously said that a deal could be reached by Friday.

But Trump's tweets surprised many and appear to reflect on the difficulties in the US-China trade negotiations that have been going on since December when the US president and his Chinese counterpart Xi Jinping agreed to work on a trade deal within a time frame of 100 days.

"For 10 months, China has been paying tariffs to the USA of 25 per cent on 50 billion dollars of High Tech, and 10 per cent on 200 billion dollars of other goods," Trump said in a series of tweets on Sunday.

These payments are partially responsible for America's great economic results, he said.

"The 10 per cent will go up to 25 per cent on Friday. 325 billions dollars of additional goods sent to us by China remain untaxed, but will be shortly, at a rate of 25 per cent," he said.

Trump said the tariffs paid to the US have had little impact on product cost, mostly borne by China.

"The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!" he tweeted.

The Wall Street Journal report said that Trump's tweet had taken Beijing by surprise.

"China shouldn't negotiate with a gun pointed to its head," an unnamed Chinese person was quoted as saying in the report.

A decision on whether to go ahead with the talks this week has not been made, the report said.

Chinese officials have said Beijing would not bend to pressure tactics.

Trump's latest move will raise duties on more than 5,000 products made by Chinese producers, ranging from chemicals to textiles and consumer goods.

The US president originally imposed a 10 per cent tariff on these goods in September that was due to rise in January, but postponed this as negotiations advanced.

While in Argentina, Trump agreed not to increase the import tariffs on Chinese products till an agreement is reached in 100 days. The deadline ended in March, which was extended by Trump and he did not increase the import tariffs.

Last month, Trump said the US and China could wrap up trade talks within four weeks after making quick progress on the potentially "epic" deal.

"We will probably know over the next four weeks. It may take two weeks after that.... It's looking very good," Trump had said.

He said a deal would allow a summit between him and Chinese President Xi.

Since last year when Trump launched a trade war with China, the US and China have imposed slapped tariffs on USD 360 billion in two-way trade.

The US has imposed tariffs on USD 250 billion of Chinese goods, having accused the country of unfair trade practices.

Beijing hit back with duties on USD 110 billion of US goods, blaming the US for starting "the largest trade war in economic history".

Meanwhile, world markets dipped on Monday after President Trump threatened to increase tariffs on imports from China.

The CAC 40 in France lost 2.2 per cent in early trading to 5,428.65 while Germany's DAX skidded 2.1 per cent to 12,150.16. The Shanghai Composite index closed 5.6 per cent lower at 2,906.46. Hong Kong's Hang Seng index sank 2.9 per cent to 29,209.82. 

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