US President Donald Trump. Photo / AP
After US-China trade talks broke off, President Donald Trump said that "conversations into the future will continue" but that new tariffs the US imposed Friday on US$200 billion ($303.3b) in Chinese imports would remain despite Beijing's vow to retaliate.
Trump said in an afternoon tweet that the tariffs "may or may not be removed" depending on the future negotiations.
Earlier, in a series of blustering morning tweets, Trump claimed the new tariffs will help rather than hurt the US and bring "FAR MORE wealth." He offered a proposal he said would ease any negative impact on US farmers from lost sales to China.
US and Chinese negotiators concluded two days of talks Friday without resolving the standoff after the United States raised tariffs on Chinese imports, escalating tensions between the world's two biggest economies and rattling stock markets around the world.
"Tariffs will make our Country MUCH STRONGER, not weaker. Just sit back and watch!" Trump tweeted.
But investors worry about the impact of a full-blown trade war because it would raise costs for companies importing Chinese goods, could make doing business in China more difficult and would generally threaten to slow the global economy.
The talks in Washington were thrown into disarray this week after top US trade negotiator Robert Lighthizer and Treasury Secretary Steven Mnuchin accused the Chinese of reneging on commitments they'd made earlier.
"China should not renegotiate deals with the US at the last minute," Trump tweeted. "There is no need to rush through negotiations because 'massive payments' the Chinese are now paying "go directly into the Treasury of the US"
Actually, the burden of tariffs falls on US consumers and businesses that buy imports. By the end of last year, those consumers and companies were paying US$3b a month in higher taxes and absorbing US$1.4b a month in lost efficiency, according to a study by the Federal Reserve Bank of New York and Columbia and Princeton universities.
Money is indeed going into the federal treasury, but it's mostly, if not entirely, coming from the tariffs — taxes — on US businesses and consumers, not China, and it's not a driver of economic growth but rather a risk to it.
Some lawmakers have recently expressed concern about the effect of the tariffs on farmers, which Trump referenced in his tweets.
He suggested that money from the additional tariffs would allow the US to buy more agricultural goods from American farmers and ship the produce to "poor & starving" countries.
Trump tweeted that if the US bought US$15b in agriculture from farmers it would be far more than China buys now. He also said the US would have more than US$85b left over for new American infrastructure, health care or other programs.
It was unclear what numbers Trump was using to make his point. According to the United States Department of Agriculture, China bought US$9.2b in US agricultural exports in 2018.
"Our Farmers will do better, faster, and starving nations can now be helped," Trump tweeted. He provided no detail about what he meant. "Waivers on some products will be granted, or go to a new source!"
A Chinese Foreign Ministry spokesman said Beijing is hoping the Trump administration will meet China "halfway" in the dispute over trade. The spokesman, Geng Shuang, spoke just hours after the US raised tariffs Friday on US$200b in imports from China to 25 per cent from 10 per cent.
China said it would take unspecified countermeasures.
- AP