Tensions between the U.S. and China have reached boiling point ahead of crucial make-or-break trade talks that begin in Washington, D.C. Thursday, with both sides threatening yet more tariffs.
As a Chinese delegation led by Vice Premier Liu He headed to the U.S., President Trump made no attempt to clear the air before their arrival and in fact did the exact opposite when he eschewed most unwritten diplomatic rules by taunting China on Twitter Wednesday morning.
Giving his take on the cracks that started to emerge in trade negotiations over the weekend when Chinese officials allegedly pulled back on a number of concessions they had previously made, he told his 60.1 million followers that he believes the action was due to their hopes to negotiate with a Democrat after the 2020 election.
“The reason for the China pullback & attempted renegotiation of the Trade Deal is the sincere HOPE that they will be able to ‘negotiate’ with Joe Biden or one of the very weak Democrats, and thereby continue to ripoff the United States (($500 Billion a year)) for years to come,” he wrote.
“Guess what, that’s not going to happen! China has just informed us that they (Vice-Premier) are now coming to the U.S. to make a deal. We’ll see, but I am very happy with over $100 Billion a year in Tariffs filling U.S. coffers…great for U.S., not good for China!” he added in a second tweet.
After remaining relatively quiet over the past few days, during which it was unclear if the vice premier would even travel to the U.S., China finally hit back not long after the tweets, issuing an official response through its state newspaper Xinhua. Expressing “regrets” over the planned levy hikes, it stated that it “will be forced to take necessary countermeasures if the U.S. side puts the tariff measures into effect”.
The sharp change in direction, which became public knowledge because of another pair of tweets from President Trump on Sunday, was a surprise to most observers, who had thought that trade negotiations between the countries had been humming along nicely and would conclude this week with a positive result.
While the administration has been largely tight-lipped on the details of what led to the apparent breakdown, Reuters reported that China made an about-turn on a number of commitments in areas including theft of U.S. intellectual property and trade secrets, forced technology transfers and currency manipulation.
As for Thursday’s negotiations, if they do not go well, it will certainly spell trouble for the fashion industry, which has until now remained largely sheltered from the trade dispute, with the exception handbags.
That’s because President Trump has not only pledged to raise levies from 10 to 25 percent on $200 billion worth of goods, including handbags, this Friday, but also at a later date slap the same levies on all other Chinese imports that have as of yet not been targeted. This would amount to $325 billion and likely include apparel and footwear.
He had agreed in December to halt the planned rise on the $200 billion worth of goods as part of a trade truce, during which the two sides had agreed to hash out a deal. It was originally meant to last 90 days, but was extended.
Some commentators believe the tariff threat could just be a negotiation tactic, but the U.S. sought to prove just how serious it was on Wednesday when it filed the official paperwork for the Federal Register, paving the way for higher levies Friday.
“In the most recent negotiations, China has chosen to retreat from specific commitments agreed to in earlier rounds,” the office of the United States Trade Representative said in the filing.