US, China dig in as Trump prepares to impose fresh tariffs

BEIJING/WASHINGTON: With US President Donald Trump gearing up to impose tariffs on US$200 billion (RM828 billion) on Chinese goods and Beijing certain to retaliate against any measures, the world’s two biggest economies are locked in an escalating trade war, with no resolution in sight.

The United States is negotiating with Canada this week to try and finalise a deal to modernise the North American Free Trade Agreement (Nafta), an outcome some in the White House say will allow Washington to turn up the heat on Beijing.

“The hope is that this (Nafta) puts a lot of pressure on the Chinas of the world to help us negotiate better reciprocal trade deals,” Kevin Hassett, chair of the White House Council of Economic Advisers, told Reuters.

The world’s two largest economies have already applied tariffs to US$50 billion of each other’s goods. Talks aimed at easing tensions ended last month without major breakthroughs, and Washington appears emboldened by a sell-off in Chinese markets and a weakening economy.

The Trump administration is ready to move ahead with a next round of tariffs after a public comment period ends at midnight in Washington on Thursday (Friday afternoon Malaysian time), but the timing is uncertain, people familiar with the administration’s plans told Reuters.

The new duties will start to hit consumer products directly, including furniture, lighting products, tyres, bicycles and car seats for babies.

Trump said he was not prepared to make a deal with China “that they’d like to make.”

“We’ll continue to talk to China,” he said at the White House on Wednesday. “But right now we just can’t make that deal.”

Beijing appears to be bracing for a long fight.

Official Chinese media is asserting that Trump’s trade war is aimed at containing China’s rise, a perception solidifying Beijing’s resolve not to buckle under US demands. – Reuters