Trump to US companies: Make products at home

Chinese Vice Premier Liu He talks with U.S. Treasury Secretary Mnuchin and Trade Representative Lighthizer as he leaves trade talks in Washington

Trump to US companies: Make products at home

Wall Street on Friday capped a turbulent week with a late-day rally after shaking off an early slump triggered by the latest escalation in a trade war between the United States and China.

The Trump administration raised duties on $200 billion of Chinese imports from 10 per cent to 25 per cent.

"The President also ordered us to begin the process of raising tariffs on essentially all remaining imports from China, which are valued at approximately $300 billion", the statement said.

However, U.S. importers and companies are likely to bear the cost of the tariffs when goods arrive from China.

However, Mr. Trump said the trade talks, which last just two hours on Friday, were "candid" and "constructive", and insisted his relationship with China's President Xi Jinping is strong. China's top negotiator said the two sides would meet again in Beijing at an unspecified date, but warned that China would make no concessions on "important principles".

He added, "It's normal to have hiccups during the negotiations".

Liu also struck a note of defiance.

This news came as leaders of the world's two largest economies ended negotiations Friday without a trade deal in place.

Andrew Nathan, a China specialist at Columbia University, said the Chinese would be perfectly willing to buy more American products and put a dent in America's trade deficit with China, a record $379 billion previous year. China threatened to retaliate if Trump jumped with his threat. "But China is anxious as well, because its economy is continuing to slow and President Xi Jinping is also aware that Trump has the support of the Democrats on this issue".

The higher USA import taxes do not apply to Chinese goods shipped before Friday. "Now both sides have different views, we think this is a very serious thing that can not be changed easily", he said.

The amount of purchases by China should be "in line with reality", according to a commentary by state news agency Xinhua on Saturday. Also, both sides have different opinions on the volume of additional purchase of United States goods from China. Well, the new plans seem to still be works in progress, written in pencil rather than ink.

In the ongoing trade talks, the U.S. is insisting that China change its ways and agree to let the United States check and enforce compliance.

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Still, he said he did not believe the negotiations had broken down.

Liu's optimism was tempered by U.S. Treasury Secretary Steven Mnuchin, who told CNBC on Friday that there were no further talks with China planned "as of now". For the S&P 500 and the Nasdaq it was the worst since December.

Trump continues to argue that tariffs could in some ways be preferable to reaching a trade deal.

Such a step would see price increases on smartphones, laptops and other consumer goods - the kind that Trump's advisers have been eager to avoid, out of concern for the domestic fallout. There are also differences on the "balance" of the text, the commentary said.

Liu's interview underlined the need for any agreement not to be seen as undermining Chinese sovereignty - as the US demand to change domestic laws surely would be.

Bonnie Glaser, a China specialist at the Center for Strategic and International Studies think tank in Washington, said the competitive dynamic is here to stay so long as Beijing's international influence continues to grow. "Trump thinks he can frighten the Chinese", Lam said.

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