Trump says China 'broke' deal; Beijing vows retaliation

Last Updated: Fri, May 10, 2019 10:41 hrs
Donald Trump on china

Washington: US President Donald Trump has accused China of "breaking" the deal in trade talks and is likely to increase tariffs on $200 billion worth of Chinese goods on Friday, prompting Beijing to vow to hit back with "necessary countermeasures".

The last-minute sparring came as China's Vice Premier and top trade official, Liu He, was expected to arrive in Washington later on Thursday for two days of talks with US trade negotiator Robert Lighthizer and Treasury Secretary Steven Mnuchin to save the bulk of the months-long negotiations from collapsing, CNN reported.

However, with Trump doubling-down on his threat to boost tariffs from 10 per cent to 25 per cent on $200 billion worth of Chinese goods, and Beijing vowing to respond with "necessary countermeasures", the tone of the discussions isn't likely to bridge the significant gaps between the world's two biggest economies.

Speaking at a rally in Florida on Wednesday night, the US President said: "By the way, you see the tariffs we're doing? … Because they broke the deal. They broke the deal. So they're flying in, the vice premier tomorrow's flying in - good man - but they broke the deal. They can't do that, so they'll be paying."

"If we don't make the deal, nothing wrong with taking it over $100 billion a year - $100 billion, we never did that before."

Washington also published a list of imported products that will face higher tariffs from Friday.

In response, China rejected accusations made by Washington of backtracking in trade talks and warned it would not "capitulate to any pressure".

"The US has assigned a lot of labels, such as backtracking, going back on one's word, and so on. Lots of promises have been foisted on China," a Chinese Commerce Ministry spokesman said on Thursday.

"China will not capitulate to any pressure and we have the determination and ability to defend our own interests," Gao said, warning that it "has already prepared for all possible situations".

Gao's comments come after a similar statement published by the Ministry late Wednesday.

"China deeply regrets this (hike in tariffs), and will be forced to take necessary countermeasures if the US side puts the tariff measures into effect," the statement said.

It added that an escalation in trade-related tensions would not benefit either side or the world.

In a tweet on Sunday, Trump promised to raise tariffs on $200 billion worth of Chinese goods, sending markets plummeting.

He had also said that the US could hit another $325 billion of Chinese goods with a 25 per cent tariff "shortly".

Tariffs on $200 billion worth of Chinese goods were supposed to rise to 25 per cent from 10 per cent at the start of the year but that was postponed as negotiations advanced.

The two sides have already imposed tariffs on billions of dollars worth of one another's goods, creating uncertainty for businesses and weighing on the global economy.

The International Monetary Fund has said the escalation of US-China trade tension was one factor to have contributed to a "significantly weakened global expansion" late last year as it cut its 2019 global growth forecast.