China backtracked on substantial commitments it made during trade talks with the US, prompting President Donald Trump to impose additional tariffs on Chinese goods slated to go into effect on Friday, top US trade officials say.
The swift deterioration in negotiations between the world’s two largest economies hit global financial markets as investors faced the prospect of an escalation rather than an end to a 10-month-old trade war.
Trump tweeted on Sunday that he would raise tariffs on $US200 billion ($A285 billion) worth of Chinese goods to 25 per cent from 10 per cent by the end of the week, and would “soon” target the remaining Chinese imports with tariffs, sending stocks and oil prices lower on Monday.
US Trade Representative Robert Lighthizer, who has been an advocate for tough structural changes in China, said Beijing had reneged on commitments it had made previously that would have changed the agreement substantially.
“Over the course of the last week or so we have seen … an erosion in commitments by China,” Lighthizer told reporters. “That in our view is unacceptable.”
Chinese Vice Premier Liu He is expected to be in Washington on Thursday and Friday of this week for further talks.
“We’re not breaking off talks at this point. But for now … come Friday there will be tariffs in place,” Lighthizer said.
Treasury Secretary Steven Mnuchin, considered to be less hawkish toward China, said China’s backtracking became clear with “new information” over the weekend.
He declined to give specifics and said the US side had originally hoped to conclude a deal one way or the other this week.
“They were trying to go back on language that had been previously negotiated, very clear language, that had the potential of changing the deal dramatically,” Mnuchin said.
“The entire economic team … are completely unified and recommended to the president to move forward with tariffs if we are not able to conclude a deal by the end of the week.”
A spokesman at the Chinese Embassy in Washington did not immediately respond to queries about the U.S. assertions.
“We are also in the process of understanding the relevant situation. What I can tell you is that China’s team is preparing to go to the United States for the discussions,” Chinese Foreign Ministry spokesman Gene Shuang said earlier in Beijing.
“We still hope the United States can work hard with China to meet each other halfway, and strive to reach a mutually beneficial, win-win agreement on the basis of mutual respect.”
Trump’s Sunday announcement abruptly ended a five-month truce in a trade war that has cost the two countries billions of dollars, slowed global growth and disrupted manufacturing supply chains and U.S. farm exports.
Businesses, while largely supportive of Trump’s tough stance on China, want the tariffs to be lifted.
A person familiar with the negotiations said the latest dispute came after the Chinese side sought to deal with policy changes through administrative and regulatory actions, not through changes to Chinese law as previously agreed.