Washington/Beijing - US President Donald
Trump said on Monday he would meet with Chinese President Xi
Jinping next month and that he expected their discussions would
be "very fruitful," as the trade war between the world's two
largest economies intensified.
Earlier, China announced it would impose higher tariffs on a
range of US goods including frozen vegetables and liquefied
natural gas, a move that followed Washington's decision last
week to hike its own levies on $200 billion in Chinese imports.
Trump had warned Beijing not to retaliate.
The US president said he would meet Xi at a G20 summit in
Japan in late June.
"We're dealing with them. We have a very good relationship,"
Trump said in remarks at the White House. "Maybe something will
happen. We're going to be meeting, as you know, at the G20 in
Japan and that'll be, I think, probably a very fruitful
meeting."
Trump, who has embraced protectionism as part of an "America
First" agenda, added that he had not yet decided whether to go
ahead with tariffs on roughly another $325 billion in goods from
China.
For its part, China said on Monday it plans to set import
tariffs ranging from 5% to 25% on 5,140 U.S. products on a
revised $60 billion target list. It said the tariffs will take
effect on June 1.
"China's adjustment on additional tariffs is a response to
US unilateralism and protectionism," its finance ministry
said. "China hopes the US will get back to the right track of
bilateral trade and economic consultations and meet with China
halfway."
The prospect that the United States and China were spiraling
into a no-holds-barred dispute that could derail the global
economy has rattled investors and led to a sharp selloff on
equities markets in the past week.
Global equities tumbled again on Monday, with major Wall
Street stock indexes down more than 2.0%. China's yuan currency
fell to its lowest level since December and oil futures
slumped.
"It's clear that there is a lot of nervousness around the
US-China trade negotiations and concern that it's really
deteriorating pretty significantly, and that's impacting all
areas of markets," said Kristina Hooper, chief global market
strategist at Invesco in New York.
Trump stepped up his verbal attacks on China on Friday after
two days of high-level trade negotiations in Washington ended
with the two sides in an apparent stalemate.
US Treasury Secretary Steven Mnuchin told CNBC the talks
were ongoing and he was working on when to travel to Beijing.
STEADY DRUM BEAT
Trump has accused China of reneging on commitments it made
during months of trade negotiations, which Beijing has denied.
China tried to delete commitments from a draft agreement
that its laws would be changed to enact new policies on issues
from intellectual property protection to forced technology
transfers. That dealt a major setback to the talks.
In the middle of the negotiations last week, Trump hiked
tariffs on Chinese goods to 25% from 10%. The move affected
5,700 categories of Chinese products including internet modems,
routers and similar devices.
Beijing said on Monday it would "never surrender" to
external pressure, and its state media kept up a steady drum
beat of strongly-worded commentary, reiterating that the door to
talks was always open, but vowing that China would defend its
national interests and dignity.
In a commentary, state television said the effect of the
US tariffs on the Chinese economy was "totally controllable."
On Monday, China also said US policies are threatening the
existence of the World Trade Organization, setting out a string
of grievances in a WTO "reform proposal" published by the
organization on its website.
Trump has said he is in "no rush" to finalize a deal with
China. He again defended the move to hike US tariffs and said
there was no reason why American consumers would pay the costs.
Economists and industry consultants, however, maintain that
it is U.S. businesses that will pay the costs and likely pass
them on to consumers. Consumer spending accounts for more than
two-thirds of U.S. economic activity.
US tariffs last year triggered retaliation by China, which
imposed 25 percent levies on $50 billion worth of U.S. products
including soybeans, beef and pork and lower tariffs on a list of
$60 billion in goods.
In a research note, Goldman Sachs economists said new
evidence showed the costs of Washington's tariffs on China last
year had fallen entirely on U.S. businesses and households, with
no clear reduction in prices charged by Chinese exporters.
They added that the effects of the tariffs had spilled over
noticeably to the prices charged by U.S. producers competing
with goods affected by the levies.
The United States has rolled out aid for U.S. farmers hurt
by Chinese tariffs during the 10-month trade war. Trump said on
Monday his administration was planning to provide about $15
billion to help farmers whose products might be targeted.
Farmers, who are a core political constituency for Trump's
Republicans heading into the 2020 presidential and congressional
elections, are growing increasingly frustrated with the
protracted trade talks and the failure to reach an agreement.
"What that means for soybean growers is that we're losing.
Losing a valuable market, losing stable pricing, losing an
opportunity to support our families and our communities," Davie
Stephens, president of the American Soybean Association, said in
a statement.
US soybean futures fell to their lowest in a decade on
Monday.