WASHINGTON/BEIJING (Reuters) – China backtracked on substantial commitments it made during trade talks with the United States, prompting President Donald Trump to impose additional tariffs on Chinese goods slated to go into effect on Friday, top US trade officials said on Monday.
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The swift deterioration in negotiations between the world’s two largest economies hit global financial markets as investors faced the prospect of an escalation rather than an end to a 10-month-old trade war.
Mr Trump tweeted on Sunday that he would raise tariffs on $200 billion worth of Chinese goods to 25 percent from 10 percent by the end of the week, and would “soon” target the remaining Chinese imports with tariffs, sending stocks and oil prices lower.
US Trade Representative Robert Lighthizer, who has been an advocate for tough structural changes in China, said Beijing had reneged on commitments it had made previously that would have changed the agreement substantially.
“Over the course of the last week or so we have seen … an erosion in commitments by China,” Mr Lighthizer told reporters. “That in our view is unacceptable.”
Chinese Vice Premier Liu He is expected to be in Washington on Thursday and Friday for further talks.
“We’re not breaking off talks at this point. But for now … come Friday there will be tariffs in place,” Mr Lighthizer said.
Treasury Secretary Steven Mnuchin, considered to be less hawkish toward China, said China’s backtracking became clear with “new information” over the weekend. He declined to give specifics and said the US side had originally hoped to conclude a deal one way or the other this week.