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Trump raises stakes in China trade standoff

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US President Donald Trump has taken steps to authorise new tariffs on $US325 billion ($A465 billion) in Chinese imports, as officials prepare for last-ditch talks to avert an escalation of a trade war that threatens to derail the global economy.

 

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With acrimony between Washington and Beijing increasing, there seemed to be little time to salvage what had appeared to be the framework of a tentative deal between the two sides before another round of punitive tariffs are triggered.

US Customs and Border Protection said on Thursday it would begin collecting a 25 per cent tariff on a $US200 billion category of Chinese imports at 12.01am local time on Friday, another step towards activation of President Donald Trump’s planned tariff increase.

In a guidance notice issued on CBP’s website, the agency said it would apply the 25 per cent tariff to over 5700 product import categories from China that were previously subject to a 10 per cent tariff under the US Trade Representative’s “Section 301” investigation into China’s intellectual property practices.

China is expected to retaliate against such a move, as it has with previous US tariffs, effectively subjecting all trade between the world’s two largest economies to punitive levies.

Consumer products, including mobile phones, computers, clothing and toys, would be especially hard hit.

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

“We were getting very close to a deal, then they started to renegotiate the deal. We can’t have that. We can’t have that,” Trump said at an event at the White House on Thursday.

Chinese Vice Premier Liu He is due to start two days of talks in Washington with US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin at 5pm local time on Thursday.

Earlier on Thursday in Beijing, China appealed to the US to meet it halfway to salvage their deal.

Commerce Ministry spokesman Gao Feng said the decision to send Liu to Washington despite the tariff hike threat demonstrated China’s “utmost sincerity”.

“We hope the US can meet China halfway, take care of each others’ concerns, and resolve existing problems through cooperation and consultations,” he told a news briefing.

“The US side has given many labels recently, ‘backtracking’, ‘betraying’ etc. … China sets great store on trustworthiness and keeps its promises, and this has never changed.” Gao said.

A US source close to the talks said there were three potential scenarios for the discussions on Thursday and Friday, the worst of which would be an “orderly break-up”, where the two sides agree to suspend negotiations.

The best case would be if the Chinese side walked back its demands for major changes to proposed texts so the two sides could focus on remaining sticking points with the aim of a deal in time for the G20 summit in Japan in late June.

A middle scenario would be some concessions from the Chinese side, with much more time needed to reach a deal and talks continuing under the higher US tariffs and likely retaliation from China, the source said.

US stock indexes opened sharply lower again on Thursday before paring some losses after Trump said he had received a “beautiful” letter from Chinese President Xi Jinping.

-AAP

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