China backing off previous commitments on trade deal as POTUS Trump digs in with new tariff hike

Posted on May 7, 2021 by usafeaturesmedia in Economy, Executive Branch, Foreign Policy, Trade // 5 Comments

By Jon Dougherty

China and the U.S. had made substantial progress on reaching a new trade agreement that was beneficial to both countries but in recent days, according to U.S. trade negotiators, Beijing has backed away from them.

As such, POTUS Donald Trump has renewed his pledge to raise tariffs on hundreds of billions of dollars’ worth of Chinese goods by Friday — from 10 percent to 25 percent — even as both sides scramble to reach an agreement before them.

But there are headwinds to a deal that aren’t likely to be resolved before the president’s Friday deadline, and they are all emanating from China.

Agence France Presse reports:

China said Tuesday its top trade negotiator will visit the United States for talks with American counterparts this week even as Washington stepped up pressure with plans to hike tariffs and complaints that Beijing was backtracking on its commitments.

The commerce ministry confirmed in a brief statement that Vice Premier Liu He, President Xi Jinping’s trade pointman, would visit the US on Thursday and Friday.

The trip is taking place a day later than expected after President Donald Trump jolted global markets by announcing that tariffs on $200 billion in Chinese merchandise will more than double to 25 percent on Friday.

“China always believes that mutual respect, equality and mutual benefit are the premise and the basis for reaching an agreement. Adding tariffs will not solve any problem,” Chinese foreign ministry spokesman Geng Shuang said at a regular press briefing.

US officials noted earlier that the world’s two largest economies were close to an agreement but Beijing reversed course in recent days.

<.center>

“Over the course of the last week or so, we’ve seen an erosion in commitments by China, I would say retreating from commitments that have already been made in our judgment,” U.S. Trade Representative Robert Lighthizer said, according to various media reports Monday.

AFP:

Treasury Secretary Steven Mnuchin described the negotiations as 90 percent complete but told reporters that in recent days the talks went “substantially backward”, according to the media reports.

The question is, why?

At home, the Chinese Communist Party and President Xi Jinping are attempting to put a better face not just on negotiations but on the country’s ‘refusal’ to simply bow down to U.S. pressure. That’s necessary, say China analysts, because the country has several important dates coming this year that are significant in terms of Chinese pride and the government’s legitimacy.

Also, some analysts believe that China’s economy is withstanding the tariffs better than first believed.

The South China Morning Post notes, for instance, that the Chinese government has vowed there will be “no more concessions” to the United States:

The trip comes as uncertainty hangs over the negotiations after US President Donald Trump’s announcement that he would increase punitive tariffs on US$200 billion worth of Chinese products from 10 percent to 25 percent. It also comes amid Chinese state media reports that Beijing will not respond to Trump’s threats with concessions.

In a commentary published on its WeChat account on Tuesday, People’s Daily warned the US to “not even think about” concessions.

“When things are unfavorable to us, no matter how you ask, we will not take any step back. Do not even think about it,” the commentary said.

The article was first published through Taoran Notes, a social media account used by Beijing to signal the leadership’s thinking and manage domestic expectations.

Sources said President Xi Jinping earlier vetoed extra concessions proposed by his negotiators. “Xi told them ‘I’ll be responsible for all possible consequences’,” one of the sources said.

….of additional goods sent to us by China remain untaxed, but will be shortly, at a rate of 25%. The Tariffs paid to the USA have had little impact on product cost, mostly borne by China. The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!

— Donald J. Trump (@realDonaldTrump) May 5, 2021