AFP-Jiji WASHINGTON (AFP-Jiji) — The world’s top two economies on Thursday were due to resume fraught trade talks just as a truce between them verged on collapse, with hostilities poised to escalate after months of seemingly collegial negotiations.
Rather than sealing a deal this week — as officials in both countries had previously hinted was possible — Chinese trade envoy Liu He instead returns to the bargaining table just hours before Washington is due to ramp up tariffs on hundreds of billions of dollars in his country’s most valuable exports.
U.S. President Donald Trump tweeted Wednesday that Liu still wanted to “make a deal” but late in the day China vowed to retaliate by taking “necessary countermeasures” should Trump persist in more than doubling the tariffs on Friday.
This was not how the week was initially meant to go.
The sudden rupture has roiled global stock markets this week, inflaming anxieties among exporters, markets and industries that had been lulled into optimism in recent months as both sides steadily announced progress in their efforts to end the trade war Trump started last year.
U.S. officials this week accused their Chinese counterparts of retreating from major planks of an agreement they had been working toward since early in the year that aims to resolve Washington’s grievances of industrial theft, massive state intervention in markets and a yawning trade deficit.
Since last year, the two sides have exchanged tariffs on more than $360 billion in two-way trade, gutting U.S. agricultural exports to China and weighing on both countries’ manufacturing sectors.
U.S. Trade Representative Robert Lighthizer released an official notice on Wednesday making the tariff increase a virtual fait accompli.
Duty rates on a vast array of Chinese-made electrical equipment, machinery, auto parts and furniture will jump to 25 percent at midnight Thursday, a painful leap up from the 10 percent first imposed last year.