Trump defends China trade negotiations as global markets fall

Daniel Fowler
May 16, 2019

The slightly more optimistic comments came after both sides ramped up their trade war, with China announcing details of new tariffs against U.S. imports on Monday, following the United States' move last week to target Chinese imports.

U.S. Agriculture Secretary Sonny Perdue said on May 10 that Trump had asked him to create a plan for supporting farmers. The survey-based unemployment stood at 5 per cent, versus 5.2 per cent the previous month. The idea that the government would put in writing, for the USA side to display to all the world, that it would change specific laws "is pretty much unthinkable", said a former Foreign Ministry official in China's previous government. "China's countermeasures have shown our determination to safeguard the multilateral trade system".

The announcement comes as trade tensions between the economic superpowers are rising after the United States hiked tariffs on $200 billion of Chinese goods last week, to which Beijing retaliated. It said a June 17 hearing would be held before Washington decides how to proceed. This list covers essentially all imports from China that are not now covered on a previous Section 301 list.

In the key manufacturing sector, industries that saw declines of more than two percent compared to March included motor vehicles and parts, machinery, and electrical equipment and appliances. The USTR noted it excludes pharmaceuticals and rare earths minerals used in electronics and batteries. "The task before Beijing to stabilize domestic demand amidst slower global growth and a festering trade war is not easy". President Xi Jinping does not want to appear to have backed down.

The ruling Communist Party's official People's Daily said in a commentary that the United States needed to "give it a rest" with the complaints that it was losing out to China in the trade relationship. "Because our hearts are too soft!"

Last year, the US began imposing tariffs to pressure China to drop the aggressive tactics.

And it won't be easily resolved, not even if USA and Chinese negotiators reach a truce in the next few weeks that reassures jittery financial markets.

USA soybean, corn, wheat and other agricultural organizations have voiced opposition to tariff hikes against imports from China in a joint statement, Geng said.

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Markus Huber, a trader at City of London Markets, said he expected a deal that would allow both sides to save face. Hong Kong, Australia, and Taiwan also fell. The Dow Jones Industrial Average was up 150 points around 3 p.m. Details of what the duties were before the increases were unclear.

Washington responded again by publishing a list of a further $300 billion in Chinese goods that it could also hit with 25 percent tariffs. I believe this would be the right thing to do, we must help our farmers stay in business in order to keep our food chain running efficiently.

Speaking several hours later at a dinner gathering at the White House, Trump said it should be clear in "three or four weeks" if a U.S. trade delegation's trip to Beijing two weeks ago was successful.

According to Trump's negotiators, Beijing began walking back commitments it had already made. Mr Trump and Mr Xi have political interests that are more likely to deepen the conflict than to quickly ease it.

The time before then will be "highly volatile" for financial markets, said Macquarie Bank analysts in a report.

"The Chinese say, 'We can eat grass for a year-we're not going to be bullied into something that's not good for us'".

China is not paying the cost of tariffs.

Financial markets have grown increasingly volatile, as trade tensions between the United States and China ratcheted higher in recent days and the timing of a resolution to the dispute remains uncertain.

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