Washington is seeking to impose new tariffs on Chinese goods as a means of forcing Beijing to accept a new trade deal, according to reports. If Beijing continues to resist US pressure, US President Donald Trump could introduce additional tariffs even as economic institutions raise alarms.
China has denied Trump’s claims that Beijing gave into Washington’s “extravagant demands,” in regards to a future trade deal, The Washington Examiner reported Monday.
“We don’t know what this agreement is the United States is talking about,” Chinese Foreign Ministry spokesman Lu Kang said, referring to Trump’s repeated claims that a new trade deal is almost secured.
“Perhaps the United States has an agreement they all along had extravagant expectations for, but it’s certainly not a so-called agreement that China agreed to,” the spokesman added.
According to the report, Washington was close to securing a trade deal with China in April. Beijing, however, backed out at the last moment, prompting the White House to raise existing tariffs on Chinese goods to 25 percent (up from 10 percent in most cases), the report says.
Beijing viewed the tariff hike as an attempt to “achieve unreasonable interests through extreme pressure,” Lu noted, adding that China believes further talks “can only follow the tracks of mutual respect, equality and mutual benefit.”
China reportedly responded to the tariff increase by imposing 25 percent tariffs on $60 billion of US goods, which will come into effect beginning 1 June.
The existing tariffs cover approximately $250 billion worth of goods, The Washington Examiner report says. Currently, the Trump administration is reportedly mulling the imposition of new 25 percent tariffs on an additional $300 billion worth of Chinese goods, effectively covering everything imported into the US from China.
According to a Morgan Stanley analysis cited by The Hill, the introduction of such massive tariffs will push the entire global economy into a recession. The US Federal Reserve will be forced to react by reducing interest rates to zero by 2026, the analysis says.
The introduction of new tariffs may also result in the closure of some 12,000 clothing stores in just one year, according to a report by the Swiss bank UBS, cited by Business Insider. According to the report, the US, being massively overrepresented, will need to close some 21,000 clothing stores owned by many brands by 2026. However, with the new tariffs imposed, about half that number will go out of business in just one year, the document says.
Trump, who has repeatedly claimed that the new trade deal is near completion, is set to meet with Chinese President Xi Jinping in Japan at the G-20 summit in late June, according to the Examiner.