US, China dig in heels on trade

UNWILLING to yield, US president Donald Trump and China’s government escalated their trade clash on Friday.

Beijing vowed to “counter-attack with great strength” if Trump follows through on threats to impose tariffs on an additional $100 billion (R1.2 trillion) in Chinese goods.

Trump made his out-of-the-blue move when China threatened to retaliate for the first round of tariffs planned by the US.

But for someone who has long fashioned himself as a master negotiator, Trump left it unclear whether he was bluffing or willing to enter a protracted trade war pitting the world’s two biggest economies against each other, with steep consequences for consumers, businesses and an already shaken stock market.

“They aren’t going to bully him into backing down,” said Stephen Moore, a former Trump campaign adviser who is now a visiting fellow at the Heritage Foundation. He said the Chinese “are going to have to make concessions – period”.

The White House sent mixed signals on Friday as financial markets slid from investor concern about a significant trade fight. Treasury Secretary Steven Mnuchin told CNBC he was “cautiously optimistic” that the US and China could reach an agreement before any tariffs are implemented but added, “there is the potential of a trade war”.

White House economic adviser Larry Kudlow told reporters the US was “not in a trade war”, adding, “China is the problem. Blame China, not Trump”.

Global financial markets have fallen sharply as the world’s two biggest economies squared off – the Dow Jones industrial average sank 572 points Friday.

Trump told advisers on Thursday he was unhappy with China’s decision to tax $50bn in American products, including soybeans and small aircraft, in response to a US move this week to impose tariffs on $50bn in Chinese goods.

Rather than waiting weeks for the US tariffs to be implemented, Trump backed a plan by Robert Lighthizer, his trade representative, and was encouraged by Peter Navarro, a top White House trade adviser, to seek the enhanced tariffs, upping the ante. – Ap/african News Agency/ana

PICTURE: AP/AFRICAN NEWS AGENCY/ANA A protester confronts troops east of the Jabaliya refugee camp in the northern Gaza Strip. Hamas has called for another day of protest a week after 18 Palestinians were killed in clashes with Israeli forces during a march to the border to commemorate Land Day.