China will "never surrender" in trade row

Lloyd Doyle
May 13, 2019

"China should not retaliate - will only get worse!" he tweeted.

"The U.S. sharply hiking tariffs on Chinese imports and China threatening to retaliate has thrown into doubt the possibility of the two sides reaching a deal after nearly a year of talks", Jasper Lawler of LCG said in a commentary.

The additional tariff of 25pc will be levied against 2,493 goods including liquefied natural gas, soy oil, peanut oil, petrochemicals, frozen vegetables and cosmetics, the ministry said, and of 20pc on 1,078 products.

The latest round of trade negotiations between the world's top two economies ended on Friday without a deal, with US President Donald Trump increasing tariffs on $200 billion worth of Chinese goods to 25 per cent and ordering the start of a process to impose new duties on another $300 billion worth of items. The National Retail Federation says that the new tariffs are "bad news for almost every sector of the American economy - retail, farming, manufacturing and technology". He argued that the effects that the Chinese would feel from the tariffs would be long term, due to a diminished gross domestic product. "I think both sides are very very very far apart".

"China's adjustment on additional tariffs is a response to USA unilateralism and protectionism", the ministry said. The hikes declared by the Chinese will affect goods that were initially hit with five percent tariffs previous year after Trump levied 10 percent tariffs against the $200 billion of goods.

But Liu downplayed the level of tensions, saying China could cope with the challenges posed by the trade dispute. "Given that Trump now appears to have a unified administration while China stalls, we don't expect any quick resolution".

Trump has railed against the Chinese since the middle of his 2016 presidential campaign, complaining about unfair trade practices that put Beijing at an advantage.

"We would like to see these corrections in an agreement which is codified by law in China, not just a State Council announcement".

That reversal spurred Trump's move last week's to raise tariffs from 10% to 25% on a $200 billion tranche of imports from China.

While praising Trump, Bannon slammed Treasury Secretary Steven Mnuchin, who's been personally involved in the negotiations with China.

The White House and US Trade Representative's office did not immediately return a request for comment.

Both sides are eager to portray the discussions as productive and ongoing in a bid to keep markets calm and ward off broader economic fallout and damage to things like business investment and sentiment.

Talks in Washington broke off on Friday without a deal, but both sides have indicated that future talks are likely. Ironically, such efforts could reduce the possibility of a deal and prolong the tariffs, one person close to the talks said.

Benchmark 10-year notes last rose 17/32 in price to yield 2.3944%, from 2.455% late on Friday.

Trump on Saturday took to Twitter to taunt the Chinese.

China's nationalist Global Times tabloid also said in an editorial on Monday that the country had no reasons to fear a trade war.

United States benchmark 10-year Treasury note yields inched down to 2.439pc, partly as a safe haven but also on speculation that the escalating trade war would put more pressure on global growth and thus keep major central banks accommodative.

Other reports by Iphone Fresh

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