China announces new tariffs
In just a couple of weeks the prospect of a wide-ranging agreement to end the year-long trade war has almost completely collapsed.
On Friday, the Trump administration raised tariffs on $200 billion of Chinese exports from 10% to 25%, after the US leader accused China of trying to back out of the deal by renegotiating key aspects of it. Washington also said it would start the process of adding duties to almost everything else which China sends to the US, valued about $300 billion.
In response, China announced on Monday it would be raising tariffs on roughly $60 billion of US exports.
The mood was a stark contrast to late April, when there was speculation a deal could be signed within weeks.
But on the face of it, neither side is showing much concern about the rapid escalation. Trump told reporters in the Oval Office on Monday that he was happy to impose more tariffs. “I love the position we’re in,” he said.
In Beijing, Foreign Ministry spokesman Geng Shuang told a daily press briefing that China would “never yield to external pressure.”
“China hopes the US can make joint efforts and work with China to solve mutual concerns based on mutual respect, and to reach a mutually beneficial deal,” he said.
US markets clearly did not relish the trade tensions, with the Dow closing down 617 points and the S&P 500 falling by 2.4%. For both, it was their worst day since January 3.
Trump and Xi are expected to meet at the G20 summit in Japan in June.
Hot and cold
Up until Wednesday last week, Chinese state media had barely mentioned renewed tensions between Washington and Beijing over trade.
Instead TV, newspapers and online media sites were suddenly full of good news about the Chinese economy and its resilience in the face of global headwinds.
On May 7, the People’s Daily published a front-page article titled “China’s Economy: Full of Resilience,” citing strong economic data. Xinhua ran a similar story.
CCTV aired a five-minute report in its flagship evening newscast under a similar banner, complete with a video montage of crisscrossing high-speed trains, automated factory assembly lines and busy container ports.
But there were hints of what was to come. State-run social media account Taoran Notes, under the Economic Daily newspaper, declared ominously that if a deal is “unfavorable, (China) won’t budge no matter how you ask.”
On Wednesday last week it went even further. “We are no stranger to the scenario of fighting while negotiating.”
Source: Cable News Network