China warns it 'won't capitulate' as U.S. trade talks loom

China warns it 'won't capitulate' as U.S. trade talks loom

However, Trump did not say whether that would occur before a scheduled increase in tariffs on US$200 billion (NZ$303 billion) in Chinese goods takes effect at 12.01am on Friday (US time).

The Trump administration raised the import taxes on those goods from 10 per cent to 25 per cent.

Trump, who has adopted protectionist policies as part of his "America First" agenda aimed at rebalancing global trade and boosting US manufacturing, accused Beijing of reneging on commitments made during months of negotiations.

"Matching the USA dollar-for-dollar on the US tariffs would imply raising a 25% tariff on all US imports, including those that go into China's exports", Setser said.

In retaliation, China has promised to take "necessary countermeasures" against the U.S. if Washington follows through with the plan.

China responded to earlier USA tariff hikes by imposing penalties on $110 billion of American imports but is running out of goods for retaliation due to their lopsided trade balance. The diplomatic cable from China arrived in the US on Friday with many edits to the 150-page draft trade agreement that would have eliminated all the trade progress the two countries made since a year ago. Only when those shipments complete the three- to four-week voyage across the Pacific to the USA would they face the 25% tariff.

While the USA president said a trade deal was still possible - adding that he had received a "very beautiful" letter from Chinese President Xi Jinping - he repeated his warning.

On Iran, Trump said he could not rule out a military confrontation after Tehran relaxed restrictions on its nuclear program in response to USA sanctions imposed following Trump's withdrawal of the United States from the accord with a year ago. "To do so, he needs a public document with clear gains for the US", Scissors said.

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With this move, US President Donald Trump has effectively dealt a fresh blow to not just the Chinese economy - as he had presumably hoped - but also to US's. Myron Brilliant, head of worldwide affairs at the U.S. Chamber of Commerce, described China's trade policies as "a threat to our economy, to our competitiveness and to our global trading system" late last week while calling for a strong deal.

"I just received it", Trump said. On Wednesday, he continued that line of attack, claiming the Chinese had pulled back from negotiations in hopes that they'll be able to negotiate with "one of the very weak Democrats and thereby continue to rip off the United States".

Global equities tumbled toward five-week lows as the escalating trade fight fed worries about the world economy and investors sought the safety of bonds and the Japanese yen, which hit a six-week high against the U.S. dollar.

Trump on Sunday also threatened to levy tariffs on an additional US$325 billion of China's goods, on top of the US$250 billion of its products already hit by import taxes. That's still a small black cloud rather than a thunderstorm, but it suggests that markets are pricing trade-war risk into the USA dollar as well as the Chinese yuan.

"President Trump faces a political battle selling a China deal as being worthwhile". In addition, if China dumps Treasuries, that could cause prices to plummet, driving yields higher and devaluing whatever USA debt the country is still holding.

The world's two largest economies have been embroiled in a tit-for-tat tariff war since July 2018 over U.S. demands that the Asian powerhouse adopt policy changes that would, among other things, better protect American intellectual property and make China's market more accessible to U.S. companies.

"Should tensions escalate significantly in coming days, we expect a pronounced market reaction".

"Our industry supports more than 18 million U.S.jobs - but raising tariffs will be disastrous", Shapiro said in a statement. It last levied tariffs, of 5 percent to 10 percent, on $60 billion of USA goods including liquefied natural gas and small aircraft in September.

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