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China preparing US team despite Trump’s tariff threat

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China preparing US team despite Trump’s tariff threat

Beijing: China is still preparing to send a delegation to Washington for trade talks despite US President Donald Trump latest threat to impose fresh trade tariffs worth $200 billion on Chinese goods, Foreign Ministry spokesman Geng Shuang said here on Monday.

On Sunday night, the President warned that he would lift tariffs on Friday on a bundle of Chinese goods to 25 per cent from the current 10 per cent threshold.

Trump also warned his administration could tax nearly all of the roughly $500 billion of Chinese exports to the US.

“There have been many times that the US side has threatened to increase tariffs,” Geng told the South China Morning Post newspaper when asked about the latest development.

“China’s positions are clear and the US side is well aware of them. (We have hoped) to make progress in our trade talks and (we) hope the US side can work together with us and move in the same direction so we can achieve a deal that can benefit both sides.

“Everyone in China and abroad is very concerned about the next round of talks and we are also learning about the relevant changes. The Chinese delegation is preparing to go to the US for the negotiations.”

There were high hopes that Vice Premier Liu He’s trip to Washington on Wednesday for the 11th round of talks would produce a deal to end the trade war which has ravaged the global economy for almost a year.

Liu could now depart Beijing on Thursday, three days later than previously scheduled, and leave Washington a day later, the South China Morning Post quoted a source, who has been briefed on the latest arrangements, as saying.

Another source said both sides remain committed to a final agreement, but Trump’s threat puts the Chinese delegation in a difficult position as any agreement could be perceived by the domestic audience as a capitulation to the White House.

Trump imposed duties of 25 per cent on an initial $50 billion of Chinese goods in July and August last year and then 10 per cent on an additional $200 billion in products in September.

A scheduled increase to 25 per cent on the later batch was put on hold after talks between Trump and his Chinese counterpart Xi Jinping in Argentina in December.

Following Trump’s threat, the Shanghai Composite Index dropped around 5 per cent by midday Monday, while Hong Kong’s Hang Seng Index was more than 3 per cent lower. Japanese markets were closed for a public holiday.

The announcement also hit US stocks, sending Dow futures down more than 500 points early Monday morning. The broader S&P 500 was set to open down 2.1 per cent. Nasdaq futures were down 2.3 per cent.

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