Trump threatens higher tariffs on $200bn of Chinese goods

US President Donald Trump is not satisfied with the pace of progress in negotiations with China

ALEX BRANDON APUS President Donald Trump is not satisfied with the pace of progress in negotiations with China

In his tweets Sunday, Trump said the tariff increase will happen Friday. The president's tariffs, however, have been extremely useful in negotiating.

The United States first imposed tariffs on $50 billion worth of Chinese goods as a punitive measure.

"The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!"

Trump also raised the possibility of imposing a 25 per cent tariff on another US$325 billion in imports from China not now covered. An increase to 25 percent tariffs on $200 billion in Chinese exports from 10 percent would raise the drag to 0.9 percentage point.

Trump's action came as a major Chinese delegation is expected to arrive Wednesday in Washington for the latest round of talks to end the trade war between the world's two biggest economies - a round billed as the last one and possibly leading to a deal to end the conflict.

Investors were taking risk off the table on concerns that Trump's threat would halt progress in talks between the world's biggest economies, especially since some recent gains in United States equities were due to optimism they would reach a deal.

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Trump suggested in announcing the move on Twitter that he was acting because he's not satisfied with the pace of progress in negotiations with China.

"He's trying to pressure China into a deal". China's nationalists view this as an unacceptable surrender of Chinese sovereignty.

But in December, on the sidelines of the G-20 summit, Trump and Xi agreed to a 90-day truce, in which Beijing promised to import more US agriculture and energy products, and crack down on illegal fentanyl coming into the United States.

In recent days, USA officials grew frustrated with some of China's backpedaling on some of their earlier commitments, including on the crucial matter of technology transfer, two people familiar with the situation said.

Last week, Treasury Secretary Steven Mnuchin said the USA and China had made progress on hard issues, including key market access and rolling back on punitive tariffs. The International Monetary Fund cut its global outlook last month to the slowest pace since the financial crisis, warning that an escalation in tariffs could push growth even lower. By the end of previous year, the study found, they were paying $3 billion a month in higher taxes and absorbing $1.4 billion a month in lost efficiency. "Tariff man is back just in time to make the stock market dive, dive, dive".

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