China may reject new trade talks if more tariffs imposed

Investors hope fresh talks will avert an all-out US-China trade war

Investors hope fresh talks will avert an all-out US-China trade war

White House economic adviser Larry Kudlow said on Monday that the United States was ready to negotiate a trade deal with China if Beijing was ready for serious discussions.

"We are ready to negotiate and talk with China any time that they are ready for serious and substantive negotiations towards free trade to reduce tariffs and non-tariff barriers, to open markets, to allow the most competitive economy in the world, ours, to export more and more goods and services to China", Mr Kudlow told the Economic Club of NY.

The message will be especially poignant to Canada, with which the now engaged in a trade stand-off, and Europe, a heavy bearer of steep steel and aluminum tariffs introduced earlier in the year by the president.

The new round of taxes are jeopardizing talks led by Treasury Secretary Steve Mnuchin with Chinese officials to end the cycle of tit-for-tat tariffs.

He didn't rule out a trade deal and added that President Trump had a "grand strategy" for the talks but that it was hard to implement reforms.

Besides retaliating with tariffs, China could also restrict export of goods, raw materials and components core to US manufacturing supply chains, former finance minister Lou Jiwei told a Beijing forum on Sunday, according to an attendee.

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That would mean imposing new taxes on all of the goods the U.S. imports from China.

Beijing has issued a list of another $60 billion of American products for retaliation if Mr. Trump's next tariff hike goes ahead.

Writing on Twitter, he said: "Tariffs have put the U.S. in a very strong bargaining position, with billions of dollars and jobs flowing into our country - and yet cost increases have those far been nearly unnoticeable". American officials also worry they might erode US industrial leadership.

The planned tariff rate is less than half the 25 per cent level the administration had initially considered.

China wants talks based on 'mutual trust, ' said a foreign ministry spokesman, Geng Shuang.

American businesses have come out strongly against the tariffs, saying they have the potential to raise retail prices.

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'Further, if China takes retaliatory action against our farmers or other industries, we will immediately pursue phase three, which is tariffs on approximately $267 billion of additional imports, ' a statement from Trump warned.

Also Monday, an official newspaper called for more aggressive measures to "make American pain worse" following tariff hikes by both sides on $50 billion of each other's goods.

USA officials say those violate Beijing's market-opening commitments and worry they might erode United States industrial leadership.

China's Foreign Ministry said it welcomed the invitation, but Trump later raised questions about it, saying on Twitter that he was under no pressure to make a deal with Beijing and that the United States "will soon be taking in Billions in Tariffs & making products at home".

"We have been very clear about the type of changes that need to be made, and we have given China every opportunity to treat us more fairly".

Lou is chairman of the National Council for Social Security Fund.

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