Eugene Hoshiko/Getty Images; Reuters
- China vowed on Thursday to retaliate against the Trump administration’s threats to levy additional tariffs on its products next month.
- The move cast further doubt on trade negotiations a day after Wall Street suffered its worst losses of 2019.
- But both sides have expressed willingness to hold further high-level talks, staving off some concerns about the world economy.
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China vowed on Thursday to retaliate against the Trump administration’s threats to levy additional tariffs on its products next month, casting a doubt on trade negotiations a day after Wall Street suffered its worst losses of 2019.
In an official statement, China said the US had "seriously" violated a recent ceasefire and that it would take "necessary" but unspecified countermeasures. President Donald Trump said Monday he would briefly postpone some duties on Chinese products that were originally set to take effect September 1, but administration officials said that move was not meant to be a concession.
Hua Chunying, a spokesperson for the Chinese Foreign Ministry, told reporters Thursday that the two sides have still maintained high-level communication through meetings, phone calls and letters. That seemed to calm investor nerves, with US equity futures erasing earlier losses on the headline.
The Office of the US Trade Representative did not respond to an email requesting comment.
Trump suggested in tweets Wednesday evening that he and President Xi Jinping should meet in what would be their first encounter since June, when two two sides agreed to a truce that restarted negotiations. Trump has since accused China of reneging on past commitments and announced he would follow through with the tariffs, setting of a series of dramatic escalations between the two sides.
Trump also on Wednesday expressed confidence in Xi’s handling of violent clashes that have erupted between protestors and authorities in Hong Kong, a semiautonomous Chinese territory. Focused on the prospect of winning a trade deal, Trump has been reluctant to back the pro-democracy protestors, according to POLITICO.
"I know President Xi of China very well," Trump wrote on Twitter. "He is a great leader who very much has the respect of his people. He is also a good man in a ‘tough business.’ I have ZERO doubt that if President Xi wants to quickly and humanely solve the Hong Kong problem, he can do it. Personal meeting?"
US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin have negotiated with Chinese counterparts in recent weeks and have another phone call planned for the end of August. Tariffs are still set to be levied on roughly $300 billion worth of products, with one round effective in September and another in December.
Trump has for months oscillated between renewing trade threats against China and expressing optimism toward a deal. Last week, he said that an anticipated meeting between the two sides in Washington next month could be canceled. Trump administration officials have said in recent days there were no concrete plans for such a meeting.
Trade tensions have shaken both economies at a time when world growth was already expected to slow. US stocks recorded their worst day of the year Wednesday after a key recession signal flashed for the first time since the 2008 financial crisis. In his tweets that evening, Trump attempted to cast a positive light on recent trade negotiations.
"Good things were stated on the call with China the other day. They are eating the Tariffs with the devaluation of their currency and ‘pouring’ money into their system," Trump wrote in a tweet Wednesday.
He also sought to shift the blame for financial-market turbulence away from tariffs, which have threatened to hurt American businesses and consumers.
"The American consumer is fine with or without the September date, but much good will come from the short…….deferral to December," Trump said. "It actually helps China more than us, but will be reciprocated. Millions of jobs are being lost in China to other non-Tariffed countries. Thousands of companies are leaving. Of course China wants to make a deal. Let them work humanely with Hong Kong first!
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Source: Business Insider – gheeb@businessinsider.com (Gina Heeb)