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U.S.-China tariff war escalates, talks continue

Credit: Reuters Studio
Published on May 10, 2019 - Duration: 01:04s

U.S.-China tariff war escalates, talks continue

U.S. Trade Representative Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin met with Chinese Vice Premier Liu He in Washington on Friday for a second day of trade talks.

The United States escalated a tariff war with China by hiking levies on $200 billion worth of Chinese goods amid last-ditch talks to rescue a trade deal, as U.S. President Donald Trump signaled that talks could drag on beyond this week.

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U.S.-China tariff war escalates, talks continue

U.S. Trade Representative Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin met with Chinese Vice Premier Liu He in Washington on Friday for a second day of trade talks.

The United States escalated a tariff war with China by hiking levies on $200 billion worth of Chinese goods amid last-ditch talks to rescue a trade deal, as U.S. President Donald Trump signaled that talks could drag on beyond this week.

In a series of early morning tweets on Friday, Trump defended his decision to raise tariffs, saying there was no need to rush into a deal and adding that the American economy would be boosted more by the levies than by an eventual deal.

But even as Beijing threatened retaliation, negotiators agreed to stay at the table in Washington for a second day, keeping alive hopes of an agreement that would remove a major threat to the global economy.

Trump, who has adopted protectionist policies as part of his "America First" agenda, issued orders for the tariff increase, saying China "broke the deal" by reneging on earlier commitments made during months of negotiations.

China's Commerce Ministry said it would take countermeasures, without elaborating.

The Commerce Ministry said negotiations were continuing, and that it "hopes the United States can meet China halfway, make joint efforts, and resolve the issue through cooperation and consultation." With negotiations in progress, U.S. Customs and Border Protection imposed a 25% duty on more than 5,700 categories of products leaving China after 12:01 a.m.

EDT (0401 GMT) on Friday.

Seaborne cargoes shipped from China before midnight were not subject to the new tax as long as they arrived in the United States prior to June 1.

Those cargoes will be charged the original 10% rate.

"This delay might create an unofficial window during which the U.S. and China can continue to negotiate," investment bank Goldman Sachs wrote in a note, adding that it was a "somewhat positive sign" that talks were continuing.

Trump gave U.S. importers less than five days notice about his decision to increase the rate on the $200 billion category of goods, which now matches the rate on a prior $50 billion category of Chinese machinery and technology goods.

He has also threatened to impose new tariffs soon.

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