President Donald Trump threatened that the trade stand-off with China will get worse if there is retaliation for US tariffs that go into effect on Chinese goods on Monday.
“I say openly to President Xi & all of my many friends in China that China will be hurt very badly if you don’t make a deal because companies will be forced to leave China for other countries,” Trump wrote in one of several Twitter messages.
Trump’s comments come after high-level talks between Chinese and American officials broke up May 10 without a deal and ahead of an expected announcement Monday from US officials detailing their plans to impose a 25 per cent additional tariff on all remaining imports from China — some $300 billion in trade.
Also read: Trade war: China broke the deal, says Trump
As Beijing promised retaliatory measures, Chinese state media blamed the US for a lack of progress in trade talks while emphasizing the country’s economic resilience.
People’s Daily, the flagship newspaper of China’s Communist Party, said in a front-page commentary that the US should take full responsibility for the setbacks because it went back on its word and imposed more levies on Chinese products. “That cast a shadow on the trade talks and directly led to the fruitless outcome of trade discussions,” the paper said.
The ongoing trade fight between the world’s two biggest economies is roiling markets and weighing on projections for global growth. US equity futures slumped, pointing to a big drop at the open in New York and stocks declined across Europe and Asia Monday as investors awaited the next phase of the escalating trade war between America and China. The yuan tumbled and Treasuries rallied.
Trump’s latest China trade comments brought to at least 30 the number of tweets or retweets he’s issued about China or tariffs since May 10, the day they the last round of trade talks concluded.
Impact of conflict
Perhaps with an eye toward the 2020 election, the American President and his aides are insisting that the renewed conflict will not adversely affect the US economy, putting them at odds with many economists.
The White House’s top economic adviser, Larry Kudlow, predicted that the impact on US jobs and growth from higher tariffs assessed on Chinese goods would be minimal, while conceding that both sides will suffer from the trade war.
Trump has repeatedly said that China will pay the tariffs that increased May 10 to 25 per cent from 10 per cent on $200 billion in Chinese goods. Kudlow undercut that in an interview on Fox News Sunday.
“No date has been set for fresh talks, but its likely Trump would meet with Chinese President Xi Jinping during the G20 meeting in Osaka, Japan, in late June,” Kudlow said.