U.S. President Donald Trump tweeted on Sunday about his plan to raise tariffs on Chinese goods worth $200 billion. Trump on his tweet said that it is increasing tariffs to 25% from the current 10%. Many market analysts said the threat could potentially ruin the current progress China and the U.S. have made thus far. It was previously reported that a trade deal could be made between the two countries by Friday this week.
On Wednesday, President Trump said his threat to increase tariffs was caused by China’s negotiating position, saying that it “broke the deal”.
The vocal leader at a campaign rally was quoted as saying, “by the way, you see the tariffs we’re doing? Because they broke the deal. They broke the deal. So they’re flying in, the vice premier tomorrow is flying in — good man — but they broke the deal. They can’t do that, so they’ll be paying.”
Contrary to recent reports that the world’s two largest economies could strike a deal soon, the U.S. president said trade talks with China had been moving “too slowly” as Beijing tried to re-negotiate. Trump also said that the U.S. “won’t back down until China stops cheating our workers and stealing our jobs.”
Trump’s comments scaring the financial markets
Chris Rupkey, managing director and chief financial economist at global financial group MUFG, said Trump’s comments are “scaring the daylights out of the financial markets”.
If Trump pushed through with his threat to hike tariffs, the Chinese ministry said it will have to take necessary countermeasures.
Trump believed that his country would be fine if the deal falls apart. “If we don’t make the deal, nothing wrong with taking in over $100 billion a year, $100 billion, we never did that before,” he said.
Chinese Vice Premier Liu He and his delegation are set to hold trade talks with Trump’s negotiators this week. The premier is likely to clear up any misunderstandings that might have arisen.
Also read: China’s Economic Slowdown: Which currencies are most vulnerable?
