WASHINGTON: US President Donald Trump decided to play hardball with Beijing ahead of a key round of negotiations this week, threatening to impose tariffs on all of the $550 billion in Chinese goods imports.

The threat tanked stock markets worldwide and frightened US farmers and businesses caught in the crossfire who have been banking on a resolution to the year-long conflict.

Comments from officials in recent weeks indicated the sides were making progress towards an agreement aimed at addressing long-standing concerns about the forced transfer or outright theft of American technology, as well as reducing the US trade deficit with the world’s second largest economy.

But after his weekend threats to ratchet up tariffs by the end of the week — which prompted reports the Chinese might cancel the talks in Washington due to begin on Wednesday — Trump remained defiant.

“The United States has been losing, for many years, 600 to 800 Billion Dollars a year on Trade. With China we lose 500 Billion Dollars,” he said on Twitter on Monday. “Sorry, we’re not going to be doing that anymore!” Trump has continued to equate the US trade deficit as a loss or as payments to trading partners and tariffs as payments from the offending country to the United States.

But economists stress that it is American businesses and consumers who pay the tariffs and are hurt by higher prices.

US manufacturers and farmers were becoming more optimistic amid signs of progress and comments from officials that the talks were entering their final phase, reinforced by reports Beijing was sending 100 officials to this week’s negotiations.

The hope was that tariffs and counter-tariffs on a total of $360bn in two-way trade would be lifted, helping farmers and manufacturers who had suffered in the trade war.

But Trump in a Twitter screed on Sunday accused China of trying to “renegotiate” the trade deal, threatened to more than double the existing tariffs to 25 per cent from the current 10pc and then extend the higher tariffs to the remaining goods that had been spared so far — although that would require a lengthy process of notification and public hearings.

Published in Dawn, May 7th, 2019