U.S. President Donald Trump has increased the pressure on Beijing to bring an end to the ongoing trade war, threatening to ramp up tariffs if a trade deal is not made by the end of the week.
President Trump toppled what seemed robust advancement towards reaching a trade pact after he threatened on Sunday to scale up tariffs on Chinese-made items unless Beijing moves closer to a deal. Liu He, the Chinese vice premier Beijing’s lead trade negotiator and economic policy overseer, had been set to travel to Washington for trade deal talks scheduled for Wednesday that were largely seen as possibly being the last round before reaching a trade deal.
For 10 months, China has been paying Tariffs to the USA of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods. These payments are partially responsible for our great economic results. The 10% will go up to 25% on Friday. 325 Billions Dollars….
— Donald J. Trump (@realDonaldTrump) May 5, 2019
Trump stated existing tariffs on $200 billion worth of Chinese items would be increased from 10% to 25% and the U.S. would add 25% tariffs on an additional $325 billion worth of Chinese products that are presently untaxed. Trump blamed the sluggish rate of trade deal settlements for the new constraints
China’s foreign ministry stated that officials were still preparing to travel to the U.S. for the next round of talks but were not able to validate when, as signs that a delay are beginning to emerge. China’s reaction came after Trump said in a series of tweets that progress on a trade deal was too slow, while threatening to slap steeper tariffs on Chinese goods.
Stock markets respond to latest trade deal news
Stock markets have been both the primary beneficiaries and the biggest losers in the ongoing trade war saga, jumping and falling on each piece of news regarding the potential of a trade deal.
The latest rhetoric sent investors into a whirlwind, as futures on all major United States indexes fell by a minimum of 1.8% at their worst levels. Abroad, markets were also a sea of red, with China’s Shanghai Composite diving 5.58% and Hong Kong’s Hang Seng index tanking 2.9%. Europe’s benchmark Euro Stoxx 50 also fell by 2%.
Warren Buffett commented on the pre-market market fall, mentioning that the reaction was “reasonable.”.
Buffett likewise noted that “If we actually have a trade war, it would be bad for the whole world, and could be very bad, depending on the extent of the war,” adding, “There are times in negotiations when you talk tough.”
