Wall Street drops as investors await outcome of US-China trade talks

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Lighthizer's office said tariffs on US$200 billion of Chinese goods would rise to 25% from 10% at 12.01am (0401 GMT) on Friday, during the discussions in Washington.

"We're the piggy bank that everybody steals from, including China", said Trump on Thursday during a wide-ranging press briefing.

June Comex gold futures may be underpinned throughout the session on Friday, but prices may not move much if money leaving the stock market continues to flow into the Japanese Yen and U.S. Treasurys for protection.

Trump has railed since his days on the campaign trail about the U.S. hemorrhaging money on global trade agreements.

The U.S. and China have raised tariffs on tens of billions of dollars of each other's goods in their dispute over U.S. complaints about China's technology ambitions and practices.

Cal Dooley, president and CEO of the American Chemistry Council, said on Monday he believed the risks of continuing to use tariffs as a negotiating tactic with China are simply too high, and potential benefits remain unclear. His tweet said that China might be trying to renegotiate the trade deal with the hope that it can negotiate better with the Democrats in 2020, with "hope" in capital letters.

If the United States tariffs go ahead, the Chinese have said they will retaliate in kind.

The administration and analysts have been reluctant to specify what commitments the Chinese government has backpedaled on, but both have acknowledged that as the two countries have neared the finish line, there is a faction in Beijing that has found it hard to agree to commitments that would be enforceable under the deal.

In each of the seven chapters of the draft, China had deleted its commitments to change laws to resolve core complaints that caused the United States to launch a trade war: Theft of USA intellectual property and trade secrets; forced technology transfers; competition policy; access to financial services; and currency manipulation.

Now, Mr Trump is saying this increase will go ahead on Friday because talks with Beijing are progressing "too slowly". All of these countries retaliated with tariffs on U.S. goods.

There were smiles and waves when U.S. Trade Representative Robert Lighthizer, Treasury Secretary Steve Mnuchin and Chinese Vice-Premier Liu He met last week.

The country's share markets have taken a battering due to the renewed trade tensions, however.

Meanwhile, new economic data for April showed that inflation as measured by the consumer price index came in at the expected 2.5%, while inflation as measured by the producer price index-a measure of producers' input costs-came in at 0.9%. The market is also in a position to finish higher for the week. Analysts expected a gain. While nearly no cars are imported from China (GM imports a small number of smaller SUVs that it makes in China), a good number of auto parts are, which will increase the cost of making trucks and SUVs in the United States.

"The U.S. side has given many labels recently, "backtracking", "betraying" etc".

"For months, U.S. companies and agricultural producers and their respective trade associations have desperately urged the two sides to come to some kind of trade agreement that would prevent the further use of tariffs by both countries, fearing such a scenario would cripple their already-damaged bilateral trading relationship", said Nelson Dong, senior partner at worldwide law firm Dorsey & Whitney. That uncertainty has weighed on investor confidence around the world, and has contributed to losses.

The yuan fell over 5% against the United States dollar previous year, before broadly stabilising in 2019, according to Reuters.

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