Tariff hikes loom as US, Chinese officials meet

Trump Exaggerates Tariff Revenue

Trump Exaggerates Tariff Revenue

Kevin Divney, senior portfolio manager at Russell Investments, says it makes sense to minimize holdings in US goods companies that have more exposure to worldwide trade policies.

Imposing new tariffs on China as President Donald Trump has suggested would hurt USA businesses and keep companies like Ohio's Cleveland Whiskey from exporting their products to other countries and hiring more workers, business groups fighting the tariffs told reporters on Thursday.

The US imposed a 10% tariff on $200bn worth of Chinese products - including fish, handbags, clothing and footwear - past year.

The CBOE Volatility Index, a gauge of investor anxiety, rose for the fourth consecutive session and is at its highest level in more than three months.

Trump, speaking at an event in Washington, said he may hold a phone call with his Chinese counterpart Xi Jinping.

Media captionWill a trade deal end US-China rivalry?

"As we have said before, everybody loses in a protracted trade conflict", the body which aims to ensure global financial stability said in a statement, calling for a "speedy resolution".

But there are also major issues that remain unsolved, one of them being whether to cancel current USA tariffs on Chinese goods. During the scheduled one-year review period starting on Friday, the anti-dumping duty for certain USA steel products will remain at 14.1 percent, while that for European Union products will be 13 to 13.2 percent. "They broke the deal", Trump said.

Liu told reporters upon his arrival that he came to Washington with sincerity, saying that under the current special circumstances he hopes to engage in rational and candid exchanges with the United States side.

Noting that no one wins in a trade war, Gao said China hopes the United States will address trade issues through dialogue rather than unilateral measures.

It comes as high-level officials from both sides are attempting to salvage a trade deal in Washington.

Each side possibly believes it is better positioned than the other to survive the dispute, according to Kennedy.

China has vowed to retaliate if the USA follows through with plans to hike the tariff at 12:01 A.M. Friday morning.

"Twenty-five percent, however, is much more hard to absorb, given margins in global supply chains", Coflan added, referring to the amount of the threatened Friday increase. Companies pay tariffs to import goods and those costs usually trickle down to the consumer. "This will lead to both inflation and job loss, two challenges that this administration has not had to deal with".

China has responded to the latest United States threats by saying it will retaliate if the U.S. goes ahead.

Until last weekend, it appeared that a deal was in sight.

Anthony Nieves, who heads a survey of the services sector by the Institute for Supply Management, said the tariffs were hitting China "a lot more than what we're feeling over here in the states".

Meanwhile, American delegates refuse to say what exactly tripped up the discussions with the Chinese.

That it is suddenly expanding again at a rate in line with the previous post-war average is partly attributable to policies ranging from a new regulatory approach to tax reform.

"You see the tariffs we're doing?".

Hufbauer added that in the event of further escalation, consumers could experience significant price rises for a variety of products, while some U.S. businesses could suffer.

But Trump's 10 percent tariffs have hampered sales this year, with American imports of the fish roughly halved in January and down in February. "On the United States export side, agricultural sales will stay depressed".

Sun, a manager at a large wood door manufacturer in northeast China that ships the vast majority of its product across the Pacific, said his factory had done just that, splitting the cost of the tariffs 50:50 with their American buyers. "So we get a bigger drop in USA exports to China than we get going in the other direction".

The sudden rupture has roiled global stock markets this week and unnerved exporters caught off guard after negotiators on both sides had previously touted progress in the negotiations. Gao described accusations about Chinese firms stealing tech secrets as unreasonable and said they were not based on facts.

On balance, Trump's tactics could elicit political success, if not substantive economic gains.