Trump accuses China of renegotiating a negotiated deal

Donald Trump has raised import duties on US$250 billion of Chinese goods

Consumer products, including cell phones, computers, clothing, and toys, are to be especially hard hit.

The tariffs officially kicked in at 12:01 a.m. Friday, but the USA said talks will continue in the morning. Trump complained Beijing was trying to backtrack on earlier agreements.

Since the tariffs will only apply to goods leaving port after the deadline, there is still time for Chinese Vice Premier Liu He and chief USA trade negotiator Robert Lighthizer and Treasury Secretary Steven Mnuchin to forge a deal before the tariffs come into effect.

Trump, who has adopted protectionist policies as part of his "America First" agenda aimed at rebalancing global trade and boosting United States manufacturing, accused Beijing of reneging on commitments made during months of negotiations. "And we're getting closer to striking midnight". We can't have that.

"It's possible to do it", Trump said of the trade deal at the White House.

In response, Biden's deputy campaign manager Kate Bedingfield on Twitter criticized Trump, saying U.S. farmers, small business owners and consumers are the ones hit by the tariff battle.

In fact, back in April, the Global Times, a hawkish newspaper published under People's Daily that focuses on worldwide issues, provided detailed explanations of "Why China Should Never Make Any Concessions in the China-U.S". Now he's publicly playing hardball with the world's second largest economy by threatening new tariffs that will kick in Friday, as if striking a unilateral deal is all the American worker needs in the years ahead. He also said a new 25 percent fee on all remaining Chinese imports would follow "shortly" thereafter. The US president added he believed a deal could be done this week, but accused China of sabotaging recent talks by seeking a renegotiation. So instead of making the product, it'll be old fashion way, the way we used to do it. "I did get last night a very attractive letter from President Xi".

These tensions surrounding the current trade negotiations have been supportive of gold prices as the precious yellow metal is considered a safe-haven asset.

Trump's levies on shipments from China have so far barely been a blip for the USA economy, trimming growth by an estimated tenth of a percentage point for all of 2019, according to Oxford Economics.

Based on US Census Bureau trade data for past year, China would only have about US$10 billion in US imports left to levy in retaliation for any future US tariffs, including crude oil and large aircraft.

Markets braced for a crucial phase in the negotiations between the United States and China.

China's Commerce Ministry warned Beijing would not "capitulate to any pressure" and threatened retaliation if U.S. tariffs go up to 25 per cent as scheduled on Friday - punctuating the drastic deterioration after months of seemingly collegial talks.

-China trade talks amid signs that negotiations were turning sour as Washington readies tariffs on Chinese goods.

Only recently, the two sides seemed to be nearing an agreement that would put an end to the trade war. Chinese markets were on midday break when the higher tariffs took effect. China wants them lifted; the USA wants to keep tariffs as leverage to pressure the Chinese to comply with any agreement.

Washington has demanded far-reaching changes to the Chinese economy, such as subjecting state enterprises to market principles, reducing massive subsidies and ending the alleged theft of U.S. technology.

The stripping of binding legal language from the draft struck directly at Lighthizer's highest priority. American officials say China has repeatedly broken past promises.

Beijing retaliated for previous tariff hikes by raising duties on $110 billion of American imports.

If tariff hikes go ahead, "risks of a financial market collapse, extreme risk aversion, and sharp slowdown in global growth will spike", said Philip Wee of DBS Group in a report.

On Wall Street, the Dow Jones industrials dropped 0.5%.

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