US Customs and Border Protection officials have been briefed and their teams are ready.
In the latest salvo in the US–China trade war, US President Donald Trump has given the green light to new tariffs on US$325 billion (AU$465 billion) in Chinese imports.
Trump remains committed to levelling the skewed trading relationship China has long enjoyed with the West. Even as his new round of tariffs are set to come into force, top level officials are continuing their negotiations for a mutually acceptable agreement.
As the bitterness rises between Washington and Beijing, the chance to salvage what was to be the basis of a tentative deal between the two sides before triggering further retaliatory tariffs is slipping.
Donald Trump has pushed patriotic policies as part of his ‘America First’ agenda, focusing on rebalancing world trade, and improving US manufacturing.
In another step towards Trump’s planned tariff increases, the US Customs and Border Protection said on Thursday it will be applying a 25% tariff on US$200 billion category of Chinese imports at 12.01am local time Friday, RAW reports.
According to a guidance on CBP’s website, a 25% tariff will be applied to over 5700 product import categories from China that were previously held a 10% tariff under ‘section 301’ of the US Trade Representative investigation into China’s intellectual property practises, RAW reports.
But if the tit-for-tat previously seen on US tariffs continues — which it very likely will — than China will have some sort of retaliation in store.
China’s retaliation is expected to hit consumer products hard…mobile phones, computers, clothing and toys are set to be the worse.
Trump has accused China of reneging on commitments made during months of negotiations, during an event the White House on Thursday, he said:
‘We were getting very close to a deal, then they started to renegotiate the deal. We can’t have that. We can’t have that.’
On Thursday 5pm local time, Chinese Vice Premier Liu He is set to begin two days of talks at Washington with US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, according to RAW.
Commerce Ministry spokesman Gao Feng said China showed the ‘utmost sincerity’ in its decision to send Liu to Washington despite the threats of a tariff hike.
Earlier Thursday, China pleaded with the US to meet halfway in order to salvage the deal.
‘We hope the US can meet China halfway, take care of each others’ concerns, and resolve existing problems through cooperation and consultations,’ he told a news briefing.
‘The US side has given many labels recently, “backtracking”, “betraying” etc. … China sets great store on trustworthiness and keeps its promises, and this has never changed’, Gao said.
Three potential outcomes
There are three possible scenarios for the talks happening Thursday and Friday, according to a US source the worst being an ‘orderly break up’, ending in both sides suspending negations.
RAW reports that the best case would involve China going back on its demands for major changes to proposed texts, in the hopes that both sides can remain focused on striking a deal in time for the G20 summit (late June) in Japan.
The middle ground would involve concessions from China.
Further time is clearly needed in order for either side to come to a deal, the source said, stating there would likely be retaliation from China from higher US tariffs, amid the ongoing talks.
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