Trump says China ‘broke’ trade deal

By  BLOOMBERG

TOKYO • US President Donald Trump declared that China’s leaders “broke the deal” he was negotiating with them on trade, ratcheting up his rhetoric ahead of fresh talks already clouded by imminent tariff increases and Beijing’s threats of retaliation.

At a campaign rally on Wednesday night in Panama City Beach, Florida, he noted that top Chinese trade negotiator Liu He was travelling to Washington for further talks.

“Good man,” Trump said, “but they broke the deal”, leading him to order higher tariffs.

China disputed Trump’s characterisation that the country reneged. “There have been various commitments made for us,” Commerce Ministry spokesman Gao Feng said at his regular press conference in Beijing yesterday. “China is credible and honours its word and that has never changed.”

The Chinese delegation left yesterday for negotiations in the US, the Ministry of Foreign Affairs said in Beijing.

The Ministry of Commerce separately announced that it will soon publish details of planned retaliatory tariffs, while urging cooperation between the two sides to resolve the dispute.

The president and his advisors decided that he should only meet with Liu if the two sides make progress in the talks and that the decision would be made on short notice, the people said.

Liu got an Oval Office sit-down with Trump every time he travelled to the US for trade talks in recent months.

Meanwhile, US Trade Representative Robert Lighthizer has been calling members of Congress, telling them to brace for no deal and to confirm that the tariff increase is firm, one person briefed on the deliberations said.

The US said it will raise tariffs on US$200 billion (RM830 billion) of Chinese goods to 25% from 10% today.

The Chinese government has said it will retaliate with “necessary countermeasures” if the US raises tariffs.

China’s refusal to commit to law changes as part of the deal made it impossible that a final agreement can be reached this week, people briefed on the negotiations said.

They noted that apart from the most recent rift in the talks, there are other major outstanding issues such as the removal of the existing tariffs between the two nations that still have to be resolved.

Trump has a long history of attacking China at campaign rallies, although he has adopted a more diplomatic approach and even courted President Xi Jinping and senior Chinese officials in official meetings.

He has also threatened to label China a currency manipulator, but still hasn’t done so.

The Chinese delegation headed by Liu — a Communist Party Politburo (CPP) member and vice premier — is scheduled to be in Washington for two days of talks with US officials.

Trump’s hawkish supporters inside and outside the administration cheered the hard-nosed approach.

“Welcome to Thunderdome — the long economic war waged on America by the CCP has now been joined by Trump,” said Steve Bannon, Trump’s former chief strategist.

That support for further escalation stands in stark contrast with many congressional Republicans, who are hoping the threatened tariff increase is really just a negotiating ploy and the countries will ultimately be able to reach a deal.

The imposition of new tariffs and a “complete breakdown” in negotiations will probably cause a drop of 10%-15% in US stocks from their highs, and a 15%-20% plunge in Chinese equities, UBS global wealth management CIO Mark Haefele said in a note this week. — Bloomberg