China cancels trade talks with US

Clay Curtis
September 24, 2018

Shipping containers, including those of China Shipping, a shipping conglomerate under direct administration of China'a State Council, await transportation on a rail line at the Port of Long Beach on July 12, 2018 in Long Beach, California.

The Trump administration has argued tariffs on Chinese goods would force China to trade on more favorable terms with the United States.

However, the Wall Street Journal, citing unnamed sources on Friday, said Beijing changed its mind about sending Liu after US President Donald Trump on Tuesday announced a new round of tariffs on $US200 million ($A274 million) of Chinese goods.

Though a senior White House official last week said the United States will continue to engage China for a "positive way forward", neither side has signaled willingness to compromise, according to Reuters.

Treasury Secretary Steven Mnuchin had been expected to oversee the talks, which were called in hopes of easing tensions between the world's two largest economies, United States officials have said.

Economists warn that a protracted dispute will eventually stunt growth across the globe.

On Saturday, Beijing cancelled scheduled talks with Washington meant to defuse trade tensions. In relation, China has entrenched itself in the current stage of the US-Sino trade war, and turned down the possibility of negotiations between the two sides in the immediate future.

Several rounds of Sino-U.S. trade talks in recent months have yielded no major breakthroughs and attempts at arranging another meeting in coming weeks have fallen through.

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Rob Carnell, ING's chief Asia economist, said in a note to clients that in the absence of any incentives Beijing would likely hold off on any further negotiations for now.

Previous US administrations have accused China of stealing technology by forcing firms to reveal secrets as a condition to operate in the Chinese economy.

China may also be waiting for U.S. mid-term elections early next month for any hints of changes in Washington's policy stance, Carnell added.

"With generic polls favoring the Democrats, they may feel that the trade environment will be less hostile after November 6".

The latest round of Chinese imports will face 10 per cent tariffs through the end of the year, and then the rate will jump to 25 per cent.

But Mr Trump warned he could ramp up to "phase three", slapping tariffs on approximately US$267 billion of additional imports, or the entirety of the goods the United States buys from China.

It leaves Beijing hitting $110 billion worth of USA goods, almost everything China buys from the United States.

Trump has warned any retaliatory measures from China would force the USA to "immediately pursue phase three", which is tariffs on $267bn of additional imports.

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