Trump says China 'broke the deal' as tensions rise ahead of trade talks

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Donald Trump has claimed China “broke the deal” it reached in trade talks with the United States, as he ramped up hostilities ahead of further negotiations between the two nations.

The American president vowed not to back down on imposing new tariffs on Chinese imports unless Beijing “stops cheating our workers.”

The US Trade Representative’s office has announced that tariffs on Chinese goods worth $200bn (£153bn) will increase from 10 per cent to 25 per cent on Friday, on the second of two days of meetings between Chinese vice-premier Liu He and Mr Trump’s top trade officials in Washington.

In a speech to supporters at a rally in Florida on Wednesday, Mr Trump warned he would not back down and Beijing would “be paying” if no agreement is reached.

“I just announced that we’ll increase tariffs on China and we won’t back down until China stops cheating our workers and stealing our jobs, and that’s what’s going to happen, otherwise we don’t have to do business with them,” the president told a cheering crowd.

“They broke the deal,” he added. “They can’t do that. So they’ll be paying. If we don’t make the deal, nothing wrong with taking in more than $100 billion a year.”

He claimed the US was “the piggy bank that everybody wants to rob”.

Mr Trump’s comments fuelled a round of selling in Asian markets.

Beijing has announced it would retaliate if tariffs rise.

“The Chinese side deeply regrets that if the US tariff measures are implemented, China will have to take necessary countermeasures,” Beijing’s commerce ministry said on its website, without elaborating.

The world’s two largest economies have been embroiled in a tit-for-tat tariff war since July 2018 over US demands that the Asian powerhouse adopt policy changes that would, among other things, better protect American intellectual property and make China’s market more accessible to American companies.

Expectations were recently riding high that a deal could be reached, but a deep rift over the language of the proposed agreement opened up last weekend.

Reuters, citing US government and private-sector sources, reported on Wednesday that China had backtracked on almost all aspects of a draft trade agreement, threatening to blow up the negotiations and prompting Mr Trump to order the tariff increase.

The president, who has embraced largely protectionist policies as part of his “America First” agenda, warned China on Wednesday that it was mistaken if it hoped to delay a trade deal until there was a Democrat-controlled White House.

He tweeted: “The reason for the China pullback & attempted renegotiation of the Trade Deal is the sincere HOPE that they will be able to ‘negotiate’ with Joe Biden or one of the very weak Democrats.

“Guess what, that’s not going to happen! China has just informed us that they (Vice-Premier) are now coming to the U.S. to make a deal. We’ll see, but I am very happy with over $100 Billion a year in Tariffs filling U.S. coffers.”

Mr Biden’s deputy campaign manager, Kate Bedingfield, criticised Mr Trump in response, saying on Twitter that US farmers, small-business owners and consumers were the ones being hurt by the tariff battle.

Speaking to reporters, White House press secretary Sarah Huckabee Sanders said the Trump administration had received an “indication” that China wants an agreement.

US stock indexes rebounded slightly from this week’s earlier losses after her comments, but the S&P 500 and the Nasdaq closed in negative territory amid caution over trade and some disappointing earnings.

Washington is demanding Beijing make sweeping changes to its trade and regulatory practices, including protecting US intellectual property from theft and forced transfers to Chinese firms, curbs on Chinese government subsidies and increased American access to China’s markets.

Mr Trump also has sought massive hikes in Chinese purchases of US farm, energy and manufactured products to shrink a gaping trade deficit with China.

Sources familiar with the talks said China’s latest demands for changes to a 150-page document that had been drafted over several months would make it hard to avoid the US tariff hike on Friday. That increase would affect Chinese imports from computer modems and routers to vacuum cleaners, furniture, lighting and building materials.

Scott Kennedy, a China expert at the Centre for Strategic and International Studies in Washington, said the talks were at a delicate stage and much depended on what sort of proposal Mr Liu is bringing to Washington.

“I think the Trump administration is quite serious about imposing tariffs,” Mr Kennedy added. “I don’t think Liu He would have agreed to come if he was just going to give the US a lecture.”