Chinese envoy says trade talks with US have not broken down

Sunday, 12 May, 2019

The official spoke on condition of anonymity because they were not authorized to speak publicly on the matter.

The Trump administration raised tariffs on billions of dollars of Chinese goods to 25% from 10% on Friday.

Later on Friday, Chinese Vice Premier Liu He agreed that the last round of negotiations was constructive, adding that the next meeting for trade talks will take place in Beijing.

"It is like a marathon: the last phase can be the hardest", Liu told Hong Kong-based Phoenix TV after the trade talks.

Trump says despite being poised to impose the additional tariffs, he is not looking for a trade war with Beijing.

Seaborne cargoes shipped from China before midnight were not subject to the new tax as long as they arrive in the United States prior to June 1.

"We believe the tariff impact could be worth about two-tenths on GDP - depending, of course, on what Chinese retaliation looks like".

Liu He told Chinese state television that he had come to the talks "with sincerity" but that they had "run into some problems".

Chinese Vice Premier Liu He waved to the news media as he was greeted by US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin. "We're not breaking off talks at this point".

Yet to settle differences and advance talks, both sides should respect each other's core concerns, and meet each other halfway on the basis of mutual respect, equality and mutual benefit. If a deal is to be reached, the tariffs should all be eliminated. Lighthizer announced Friday evening that he was preparing to impose tariffs on the $300 billion in Chinese imports that haven't already been targeted. After U.S. -China trade talks ended Friday without a deal, Trump said he maintained faith in his "strong" relationship with the Chinese leader.

He said tariffs will bring in "far more" wealth to the U.S. than even a phenomenal deal of the traditional kind.

Beijing authorities also tried to strike a careful note in a commentary published Saturday, but warned that there would be no quick solution to the trade war. The International Monetary Fund estimates the pullback on the USA expansion at about 0.2 point, and potentially more if there's a blow to markets and confidence. "China deeply regrets that it will have to take necessary countermeasures", a Commerce Ministry statement said.

Still, U.S. business groups greeted the administration's latest move with caution.

"If we consider the state of China's economy in the medium term, we can state that the Chinese economy faced a slight downturn previous year".

Chinese analysts also suggested that China could target the US financial system, the backbone of the US economy, including unloading China's holdings of US Treasury bonds. "If businesses sit on their hands and don't invest until they figure out what's going on here, it has the potential to be more significant", he said.

Liu said it was "China's opinion that the tariffs are the starting point of the trade friction and must be totally lifted if a deal is reached". The American economy has different underlying fundamentals from the Chinese one and accordingly has certain structural advantages over its many competitors, which is why Washington was pushing for Beijing to drastically lower its tariffs and allow an influx of imports from the U.S.