WASHINGTON/BEIJING, (Reuters) – Chinese Vice Premier Liu He will travel to Washington for two days of trade talks this week, China said yesterday, setting up a last-ditch bid for a deal that would avoid a sharp increase in tariffs on Chinese goods ordered by U.S. President Donald Trump.
U.S. officials have accused China of reneging in the past week on substantial commitments made during months of negotiations aimed at ending their trade war, prompting Trump to issue a new deadline to raise tariffs on $200 billion worth of Chinese goods to 25 percent from 10 percent.
The higher tariffs are scheduled to take effect at 12:01 a.m. EDT (0401 GMT) on Friday, a spokesman for the U.S. Trade Representative’s office said. That comes right in the middle of Liu’s visit.
China’s Commerce Ministry said that Liu, who leads the talks for Beijing, will spend only two days in Washington – Thursday and Friday – instead of the three days he had previously planned before Trump announced the tariff increase.
U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin on Monday cast doubt on the talks, telling reporters China had backtracked on previous commitments.
The gloomier tone shook Wall Street, causing major stock indexes to tumble more than 1 percent. Treasury yields and oil prices also fell as the potential for an unraveling of the trade talks sparked fresh concerns about global economic growth.
During a 10-month U.S.-China war, U.S. tariffs have been imposed on $250 billion worth of Chinese goods, and retaliatory Chinese tariffs slapped on $110 billion worth of American products. Trump has pushed for sweeping changes to China’s policies on intellectual property theft, technology transfers industrial subsidies and market access.
Trump has criticized the U.S. trade deficit with China, which hit a record $419 billion in 2018, as stealing American manufacturing jobs. His hard line on China has played well with his political base in Midwestern industrial and farm states, with Trump seeking re-election next year.
Trump had initially set the tariff increase to 25 percent on $200 billion worth of Chinese goods, including internet modems and routers, printed circuit boards, vacuum cleaners and furniture, in January. He delayed the deadline until March 1 to allow negotiations, and then postponed the increase indefinitely, citing progress in the talks.