Published: Sat, September 15, 2018
Worldwide | By Gretchen Simon

U.S. Invites China to Trade Talks as Tariffs Loom

U.S. Invites China to Trade Talks as Tariffs Loom

President Trump ordered his staff to start preparing the tariffs this summer, escalating a dispute over what the USA says are China's unfair trade practices, such as state subsidies.

The possibility of new talks comes as China is wary of the "very painful" impact of additional USA tariffs given its economic slowdown, with its gross domestic product at the lower end of its growth range for the past three years.

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U.S. President Donald Trump has instructed aides to proceed with tariffs on about $200 billion more of Chinese products, a source familiar with the process said on Friday, adding that the timing is not yet clear.

A Treasury spokesman did not immediately respond to a query on the status of the China talks invitation.

July 6: The first tranche of tariffs on $US34 billion worth of Chinese goods takes effect; China responds in kind.

If both sets of tariffs go ahead it would mean virtually all of China's USA exports would be subject to new tariffs.

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This move comes despite U.S. Treasury Secretary Steven Mnuchin's attempt to restart talks with Beijing to resolve the trade war.

Washington, Europe and other trading partners say those plans violate China's market-opening commitments. The Trump administration has invited Chinese officials to hold a new round of trade talks, top White House economic adviser Larry Kudlow said Wednesday. Midlevel U.S. and Chinese officials met on August 22 and 23 with no agreements.

Among the category of "Industries most impacted by initial $50bn tariffs", automobile appears at number three in both the lists, with 80.5 of the respondents claiming that the industry was hit with the us -imposed tariffs, while 75 percent claiming that the industry was hit with the China-imposed tariffs. "This is a critical point: China can not look at this as a game where the U.S. is just trying to hurt China".

China is clearly under economic duress as its economy slows and the next round of 25 percent tariffs targeting US$200 billion worth of Chinese goods are made ready for launch in Washington.

"The question is whether anything has changed, " said Jeff Moon, a former U.S. trade negotiator in the Obama administration.

Beijing has pledged to hit back with five to 25 per cent tariffs on $60 billion in USA imports in retaliation for any measures from the US. "If nearly a half of American companies anticipate a strong negative impact from the next round of USA tariffs, then the US administration will be hurting the companies it should be helping".

The duties already levied on $50 billion worth of Chinese goods followed a study on China's intellectual property practices released earlier this year. A meeting among Cabinet-level officials could ease market worries over the escalating tariff war that threatens to engulf all trade between the world's two largest economies and raise costs for companies and consumers.

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