It took less than a day for the latest trade war ceasefire with China to crash and burn.
Just hours after reports spread that Trump is considering more than doubling planned tariffs on $200 billion in Chinese imports, raising the rate from 10% to 25%, China vowed it would retaliate, and warned the U.S. against “blackmailing and pressuring” it over trade.
As reported last night, the latest US proposal – which Trump could unveil as soon as today – would increase the potential tariff rate from 10% the administration had initially put forward on July 10 for that wave of duties in a bid to pressure Beijing into making trade concessions, to 25%. At the same time, representatives of Steven Mnuchin and Chinese Vice Premier Liu He are reportedly having private conversations as they look for ways to reengage in negotiations, however as the WSJ also reported on Tuesday, these negotiations haven’t had much, if any, success. As Bloomberg notes, “while American and Chinese officials have hinted at the possibility of restarting talks in recent weeks, it’s been almost two months since they last held high-level negotiations.”
The two sides held three rounds of formal talks, beginning with a delegation to Beijing led by Mnuchin in May. After Liu visited Washington later that month, the nations released a joint statement pledging to reduce the U.S. trade deficit with China, among other things. But within days, Trump himself backed away from the deal, saying talks would “probably have to use a different structure.”
In response to the latest escalation out of the White House, China again accused the United States of bullying, and vowed to retaliate if Trump proceeds with the measures, warning that pressure tactics would fail.