Chinese companies brace for tariff hike as trade talks begin

Share

Investors were on tenterhooks as they waited to see if Chinese Vice Premier Liu He can salvage a trade deal during two days of negotiations in Washington on Thursday and Friday, after us officials said Beijing had backtracked on earlier commitments.

With the eyes of the world on Washington for this week's high-stakes trade talks between China and the United States, none will be more focused than those of Chinese exporters who are increasingly anxious about the impact of more tariffs.

President Donald Trump says the United States was close to a trade deal with China, but then China tried to renegotiate.

FILE - Chinese Vice Premier Liu He, right, gestures as U.S. Treasury Secretary Steven Mnuchin, center, chats with his Trade Representative Robert Lighthizer before their meeting in Beijing, May 1, 2019. Neither Treasury nor the trade representative's office responded to repeated requests for comment.

Why are the Chinese still taking part in talks?

.

"If we lower prices any more we won't have any profit", he said. We will definitely have to lay off people. "We can't have that", Trump said at an event at the White House. China wants them lifted; the US wants to keep tariffs as leverage to pressure the Chinese to comply with any agreement.

That has increased pressure on President Xi Jinping, who political analysts say faces criticism within the ruling party that he has failed to manage Trump.

Plans by Washington to hike tariffs on $200 billion of Chinese goods could cut China's growth by 0.3 percentage points but the strengthening economy has become more resilient to external shocks, a Chinese central bank adviser said on Friday. China's Commerce Ministry vowed to impose "necessary countermeasures" but gave no details.

Negotiators from both countries are scheduled to meet Thursday and Friday in Washington for an 11th round of talks aimed at reaching an agreement to ease economic tensions between the world's two biggest economies.

"Mentally and materially, China is much better prepared than its US counterpart."The country's share markets have taken a battering due to the renewed trade tensions, however.China's blue-chip CSI300 index has slumped about 7 percent so far in May while in the United States, the benchmark S&P 500 index has only declined about 2 percent". Trump complained Beijing was trying to backtrack on earlier agreements.

The two have already imposed tariffs on billions of dollars worth of one another's goods, creating uncertainty for businesses and weighing on the global economy.

The US leader continues to argue that tariffs could in some ways be preferable to reaching a trade deal.

"The escalation of trade friction is not in the interests of the people of the two countries and the people of the world", the ministry said.

More news: Democratic Sen. Blumenthal threatens Trump Jr. with prison if he refuses subpoena
More news: Chasing $300B market, Intel will launch its 7-nanometer chips in 2021
More news: The Breakdown: Portland must solve the Denver offensive rebound issue, now

Earlier this week, the United States said it will escalate tariffs on hundreds of billions of dollars worth of Chinese goods.

Trump began the standoff because of complaints about unfair Chinese trade practices.

In seven chapters of the draft, China deleted commitments to change laws to resolve complaints that caused the United States to launch a trade war: theft of US intellectual property and trade secrets; forced technology transfers; competition policy; access to financial services; and currency manipulation, sources told Reuters.

A year ago 84 percent of United States frozen tilapia imports, worth $435 million, came from China, according to U.S. data. "It'll be the old-fashioned way, the way we used to do it: We made our own product".

Citing U.S. government data, NCTO said China predominantly ships end items to the U.S. versus intermediate inputs. "Let's see if we can get something done".

But now it is confronted with the threat of new tariffs coupled with the insistence by Washington that it be allowed to rewrite Chinese law according to a list that it has drawn up.

It wasn't the first time that Trump said tariffs would rise.

A coalition of retailers and farmers says IN could lose up to 15,000 jobs if the additional tariffs go into effect for one to three years.

With the trade war entering its second year, the United States and China are wrestling with a long list of hot-button issues.

"Last year the customer couldn't accept higher prices so our factory needed to lower the price to stay in business", the employee said, adding some smaller competitors had shut up shop.

Beijing retaliated for previous tariff hikes by raising duties on $110 billion of American imports.

Share