'Erosion in commitment': U.S. officials blame China for tariff hike

The US president believes that the current strength of the American economy will allow him to ratchet up the trade war, because it means that China has much more to lose than his country.

Beijing is wrestling with an internal conflict: It is eager to end a trade fight that has battered Chinese exporters, but it doesn't want to look like it's bowing to the Trump administration's demands for far-reaching concessions.

Reuters reported, citing a person familiar with the talks, that the change in language was tied to Beijing's desire to implement changes to its economy, granting the United States greater access to its markets, by means of administrative and regulatory actions instead of legislation, as had earlier been negotiated.

For weeks, Trump administration officials had been suggesting that the US and Chinese negotiators were making steady progress. "First, focused on US domestic audiences, he wants to appear to be "tough" on China, and to maintain his image among domestic constituencies as a trade warrior fighting on behalf of the US", Geoffrey Gertz, a fellow at the Brookings Institution, told DW.

Observers noted that the pressure tactic could backfire. Now, Liu has been confirmed as heading the party for truncated discussions on Thursday and Friday.

As The New York Times reported Monday, American businesses already are complaining that they bear the brunt of the cost of tariffs, even though they generally support the administration's need to negotiate a fair deal with China. According to the Alabama Department of Commerce, China bought $3 billion in goods made in Alabama a year ago.

Yes. Last week, Myron Brilliant, head of global affairs at the U.S. Chamber of Commerce, who has been briefed on the negotiations, told reporters that "94.5%" of the issues had been resolved and that talks had reached the "end game". Beijing hit back with duties on $110 billion of USA goods.

Trump has criticized the USA trade deficit with China, which hit a record $419 billion in 2018, as stealing American manufacturing jobs. News that the People's Bank of China would slash the amount of cash lenders must keep in reserve, to support small businesses, had little impact in the face of Trump's warning.

That changed over the weekend when China sent through a new draft of an agreement that included them pulling back on language in the text on a number of issues, which had the "potential to change the deal very dramatically", Mnuchin said.

"We're moving backwards instead of forwards, and in the president's view that's not acceptable", US President Donald Trump's most senior trade adviser, Robert Lighthizer, told journalists on Monday.

The possibility that the trade dispute could escalate represents a marked shift from just a few weeks ago, when talks between the USA and China appeared to be on track for an agreement. The president said he may also impose duties "shortly" on $325 billion of Chinese goods that aren't now covered, a move that would hit virtually all imports from the Asian nation. He also threatened eventual tariffs on many more imports. "China won't shun problems and is honest about continuing talks", he said. Japanese markets were closed for a public holiday.

The United States imported about $539.5 billion in goods from China in 2018 and exported $120.3 billion for a record trade deficit of $419.2 billion, according to U.S. Census Bureau data.

Trump also said he planned "shortly" to slap 25 percent tariffs on another $325 billion in Chinese products, covering everything China ships to the United States.

  • Jon Douglas