China is going back on its commitment on trade and related issues, the Trump administration has alleged while asserting that the US is going ahead with its plans to impose stiff tariffs on import of Chinese products worth over USD 200 billion beginning Friday.
US President Donald Trump, in a series of tweets on Sunday, said the US has been losing USD 500 billion per year on trade with China and he will no longer allow that to happen any more.
"The 10 per cent will go up to 25 per cent on Friday. 325 billions dollars of additional goods sent to us by China remain untaxed, but will be shortly, at a rate of 25 per cent," he said, adding the tariffs paid to the US have had little impact on product cost, mostly borne by China.
Trump's remarks came as the two countries locked in a longstanding trade war seemed near to striking a trade deal. A high-level Chinese delegation led by Vice Premier Liu was scheduled to be in Washington this week to resume talks aimed at resolving the trade war that has cast gloom over the world economy.
The bottom line is that we felt like we were on track to get somewhere, but 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, US Trade Representative Robert Lighthizer told reporters on Monday.
His comments came as a follow up to President Trump's tweets about imposing new tariffs on import of Chinese products.
Lighthizer reiterated that tariffs on USD 200 billion in Chinese imports would rise to 25 percent from existing 10 per cent.
"We can speculate as to why that happened. My own view is that these were serious, real commitments that were enforceable and that some people in China objected to that," Lighthizer said in a joint media appearance with Treasury Secretary Steven Mnuchin.
Speaking about the developments, Mnuchin alleged that it became clear over the weekend that Beijing's negotiators were trying to walk back the language that had been negotiated word-by-word.
We are not willing to go back on documents that have been negotiated, Mnuchin said, blaming China for the collapse of the trade talks.
We were in the process of planning for a summit with President Trump and President Xi Jinping at the conclusion of this agreement, he said, adding that it would be unfortunate if the US and China couldn't reach an agreement.
The Wall Street Journal reported Sunday that "China is considering cancelling trade talks that are to resume in Washington."
Reacting to the development, Indian American economist Eswar Prasad said that it would lead to a trade war.
The level of brinkmanship on both sides and their obvious mutual distrust has made the path to even a temporary cease-fire a lot murkier than just a few days ago, Prasad, professor of trade policy at Cornell University, told The Wall Street Journal.
It is likely a cooling-off period will be needed to get the talks back on track, but the imposition of additional tariffs by the US later this week could keep the talks derailed for a while to come, he added.
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