- The Chinese officials have delayed their visit to the U.S. capital city
- This happened after Donald Trump tweeted about increasing tariff on Chinese goods
- The trade war seems to have reached the tipping point
According to a Bloomberg report published May 5, 2019, China might consider delaying its Washington visit after the President of the U.S., Donald Trump hinted that he might impose further tariffs on the import of Chinese goods.
Trade Troubles Reach Tipping Point
Tensions surrounding the U.S.-China trade war seem to only be going the way up. Not impressed with the pace of trade talks between China and the U.S., Trump recently hinted on Twitter that he could impose steeper tariffs on the Asian superpower.
As a result, China is mulling delaying the U.S. trade of its top trade negotiators which was slated to take place this week, sources close to the matter told Bloomberg.
On May 5, 2019, Trump took to twitter to increase pressure on China to strike a trade deal with the U.S. at the latter’s terms. He did this by hinting that the U.S. could increase tariffs on $200 billion worth of Chinese goods from the existing 10 percent to 25 percent. Further, Trump also floated the possibility of extending a new 25 percent tariff on another $325 billion of imports.
Chua Hak Bin, a senior economist at Maybank Kim Eng Research Pte. in Singapore., said:
“Risks of a full-blown trade war are escalating. Trump’s threat may backfire as China will not want to negotiate with a gun pointing at their heads.”
The development’s cascading effect was felt across all markets as China’s yuan, equities, and crude oil all tanked. Similarly, the Australian dollar and futures on the S&P 500 Index fell too. Conversely, government treasury futures climbed with the weakening national currency.
For 10 months, China has been paying Tariffs to the USA of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods. These payments are partially responsible for our great economic results. The 10% will go up to 25% on Friday. 325 Billions Dollars….
— Donald J. Trump (@realDonaldTrump) May 5, 2019
Chinese Halt their Move
Per the report by Bloomberg, Chinese Vice Premier Liu He was slated to arrive in Washington on May 8, 2019, to advance talks on the long-stretched tariff episode. He was scheduled to arrive with a large delegation of about 100 people to help tip the dialogue over the line during the final rounds of negotiations.
However, Trump’s tweets have renewed tensions regarding the stance of the U.S. towards a successful trade deal.
The two giants have been passively imposing trade tariffs on each other since 2018 after the U.S. government focused its attention towards China’s alleged theft of intellectual property, mishandling of trade surplus, and unauthorized technology transfers, among other things.