Senior U.S. officials blasted China for allegedly reneging on commitments that it had already agreed to during trade talks. Come May 10, the United States is set to more than double the tariffs levied on China, which could send shockwaves through the global economy.
A Chinese negotiating team, which will include Chinese Vice Premier Liu He, will head to Washington on Thursday for further talks. However, the prospects for a trade deal, at least by this Friday’s deadline, seem dim.
President Trump’s chief negotiator, Robert E. Lighthizer has stated that China is retreating from specific commitments that it had already agreed to in the seven-chapter pact. So far, American officials have not revealed what specifically China wants to amend in the proposed accord.
However, it’s believed that the United States is demanding sweeping changes in the way the Chinese economy is organized. Currently, the government is heavily involved in the market economy. Many allege that the Chinese government is subsidizing companies and undertaking other actions that undermine international competitiveness.
After news of the impending tariffs were announced, China’s stock markets suffered their sharpest decline in over three years. In the United States, the Dow Jones Industrial Average dropped nearly 500 points out of the opening gate. However, American markets were able to largely make up lost ground.
The United States economy expanded by a robust 3.2 percent. With the economy humming along, President Trump may see little reason to cave to demands. Meanwhile, the Chinese government’s efforts to protect their own economy from the fallout of U.S. sanctions through stimulus measures appear to be paying off, making the Chinese less likely to cave.
