- The Washington Times - Monday, May 6, 2019

The U.S. and China were forging ahead Monday with plans for a new round of trade talks, as the Trump administration’s top negotiator renewed the president’s threat to raise tariffs across-the-board on Chinese imports and voiced anger that Beijing was trying to back out of a key commitment.

The tensions staggered world financial markets, especially in China, where stocks fell more than 5% in a single day. The U.S. markets fared much better but were also down Monday.

U.S. Trade Representative Robert E. Lighthizer said late Monday that the next round of talks with the Chinese will take place in Washington on Thursday and Friday. He said the administration plans to increase duties on Chinese imports on the “first minute” of Friday, at 12:01 a.m., asserting that China is “reneging” on earlier negotiations.

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“Over the course of the last week or so, we’ve seen an erosion in commitments by China, I would say retreating from commitments that have already been made, in our judgment,” Mr. Lighthizer told reporters.

Significant issues remain unresolved, including whether tariffs will remain in place, he said.

Treasury Secretary Steven T. Mnuchin said it became clear last weekend that China was moving “substantially backward” on some of the language on several issues that Beijing previously had agreed to, and that the development could dramatically change the deal. He said the U.S. won’t renegotiate commitments that were already made.

Mr. Mnuchin told reporters that about 90% of the comprehensive trade deal, which is more than a year in the making, had been finalized.

A spokesman for China’s Foreign Ministry said a team of Chinese trade negotiators was still planning a trip to Washington. But spokesman Geng Shuang declined to say whether top negotiator Liu He, China’s vice premier, would participate.

“The urgent task right now is for the United States to work with China and move in the same direction so that we can reach a mutually beneficial and win-win agreement based on mutual respect,” Mr. Geng said told reporters in Beijing.

Global financial markets fell sharply Monday after President Trump vowed to raise tariffs from 10% to 25% on $200 billion worth of Chinese imports by the end of the week. He also warned that the U.S. would soon impose a 25% tax on everything else China sells to the U.S. that hasn’t been subject to tariffs.

“The United States has been losing, for many years, 600 to 800 Billion Dollars a year on Trade,” Mr. Trump tweeted Monday. “With China we lose 500 Billion Dollars. Sorry, we’re not going to be doing that anymore!”

It marked a sharp change in tone for the president, who had been saying publicly in recent weeks that he intended to host Chinese President Xi Jinping at the White House soon, suggesting a final agreement was near.

Sources familiar with the talks said Mr. Trump issued the threat after learning from Mr. Lighthizer that China was trying to back out of a commitment to change Chinese law to reflect the terms of the anticipated trade deal.

The dispute has major implications for provisions of the deal aimed at ending China’s practice of forcing U.S. companies doing business there to reveal proprietary technologies and other intellectual property, Bloomberg reported.

Previously, Mr. Trump had postponed deadlines for a trade agreement in an effort to buy more time for negotiations. But on Sunday, he complained on Twitter that a deal with Beijing was coming “too slowly, as they attempt to renegotiate. No!”

China’s financial markets dropped sharply Monday following Mr. Trump’s tariff warning, leading Asian markets down. The Shanghai Composite Index fell 5.6% and the Shenzhen stock exchange dropped 7.4% — their biggest single-day losses since 2016.

U.S. stock markets fell sharply, 450 points at the opening bell Monday, but pared most of their losses throughout the day. The Dow Jones Industrial Average closed down 66.47 points, or 0.25%, to finish at 26,438.48.

The tech-heavy Nasdaq closed down 0.50%, and the S&P 500 ended the day down 0.45%.

Germany’s stock exchange fell 1.01%.

During a Rose Garden ceremony at mid-day honoring the Army military academy’s football team, Mr. Trump said the country is “setting records — over 100 days of stock market wins.”

“And our unemployment numbers are the best in 51 years,” Mr. Trump said.

This article is based in part on wire-service reports.

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