More trade talks still to come this week
One source who claimed to be briefed on the status of the talks, claimed that China would likely send a smaller delegation than the one hundred person group that was originally planned. It is not clear whether Chinese Vice-Premier Liu would be among the attendees. He led the larger group last time. Liu has been described by some officials as the “closer” who has the authority to negotiate on Chinese president’s Xi Jinping’s behalf.
The Chinese group had been scheduled to begin talks with US negotiators on Wednesday. Neither the White House, Treasury Dept. nor the Office of the US Trade Representative responded to requests for comments on the meetings.
As recently as last week the US had been expressing optimism about the possibility of a deal being announced this week, but with Trump’s new tariff threats everything has been thrown into doubt creating confusion which has resulted in US stock markets taking a dive at least briefly. A team of Barclays economists wrote in a note that if Liu did not come this would increase the likelihood that Trump would hike tariffs on Chinese goods. A recent Digital Journal article reports that Liu will probably attend the talks on Thursday and Friday.
Art Cashin, director of floor operations at the New York Stock exchange said: “It’s putting a bid under the market. They’re feeling a bit better. It is a reduced party. There was going to be over 100. But the fact they’re coming is important.”
Trump’s tariffs hike threats
Trump said that current tariffs on $200 billion worth of Chinese products would be increased from just 10 percent to 25 percent. In addition Trump will place 25 percent tariffs on $325 billion worth of Chinese goods that have no tariffs on them at present. Trump said the slow pace of negotiations was behind upping the tariffs. The tariffs will increase the cost of Chinese goods for US buyers. Should Trump carry through with his threats, stock markets could plunge and markets world wide could react negatively.
In a tweet Trump said: “For 10 months, China has been paying Tariffs to the USA of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods. These payments are partially responsible for our great economic results. The 10% will go up to 25% on Friday. 325 Billions Dollars of additional goods sent to us by China remain untaxed, but will be shortly, at a rate of 25%. The Tariffs paid to the USA 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.”
