China cancels trade talks with US

Posted September 25, 2018

The Chinese government said it would apply tariffs on 5,200 USA imports of various products worth about $60 billion, also effective on Monday.

This latest round of tariffs is the latest escalation of the mounting trade conflict between the world's two largest economies.

Hopes for talks to resolve the issue appeared to have been dealt a blow as The Wall Street Journal reported Beijing cancelled the visit of a negotiating team expected September 27-28 in Washington.

Chinese leaders have announced changes this year including tariff cuts and plans to end ownership limits in their auto industry.

"It would look weak both to the United States and at home", he said, adding that there is "sufficient stimulus in the pipeline" to limit the damage of the latest tariffs on China's economy.

The latest escalation is a result of China cancelling further trade talks with the United States according to media reports.

The white paper came as a fresh round of tariffs came into force against Chinese goods coming into the US.

In an interview with Fox News Sunday, Secretary of State Mike Pompeo promised the United States will be victorious in any trade war with China.

In a first, the Trump administration has also punished a unit of China's defense ministry for buying fighter jets and missiles from Russian Federation in defiance of sanctions on Moscow. Beijing has imposed rates of 5-10 per cent and warned it would respond to any rise in United States tariffs on Chinese products accordingly.

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On the contrary, Bank of America Merrill Lynch has forecasted that the trade war will damage the U.S. economy, resulting in the bullion to reach an average valuation of $1,350 an ounce (currently at $1,198.36 an ounce) in 2019.

"The trade war is now a reality", said Fitch economist Brian Coulton.

"The US-China trade war has no clear end in sight".

Secretary of State Mike Pompeo seemed confident on Sunday, however, that the US would win any potential trade war with China.

Analysts believe that China may be waiting for USA mid-term elections early next month for any hints of changes in Washington's policy stance.

Trump earlier this month accused China of targeting rural voters who support his presidency by hitting agricultural goods.

The General Administration of Customs said it started collecting additional taxes of 5 and 10 percent on a $60 billion list of 5,207 American goods from honey to industrial chemicals at noon.

China also scheduled a bump in tariff rates for its targeted $60 billion of USA goods for the end of the year, but it is running out of options to even the score on Trump's threatened third wave of tariffs. Though Beijing has not revealed what such steps might be, business executives and analysts say it could withhold exports of certain products to the USA or create more administrative red tape for American companies operating in China.

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