The highly damaging trade war between the United States and China seemed to be on its last legs after months of negotiations between the two nations, but now it has been thrown into the spanner following a last-minute disagreement. On Sunday, the United President Donald Trump threatened to raise the tariffs on $200 billion worth of Chinese goods to 25% and promised to do the same to $325 billion worth of goods soon, if the deal did not go through. He claimed that the Chinese had tried to renegotiate certain key elements of the deal and now the top Trade Representative of the United States Robert Lighthizer has gone on record regarding the same. Trump’s tweet and the possibility of the Chinese canceling the last round of trade talks in Washington eventually sent the Asian country’s stock market into a meltdown.
Over the past few months, Robert Lighthizer has been consistent in his public statements that the trade talks were, in fact, progressing well and other than a few issues that needed ironing out, it seemed that it was a matter of time that the new deal was going to be signed. However, nothing of the sort came about and in fact, even during the latest meeting in Beijing; Steven Mnuchin stated that the talks were progressing well. The truth, however, seems quite different and now Lighthizer has gone on record about the issues at hand. He said, “Over the last week or so we have seen … an erosion in commitments by China. That is our view is unacceptable.”
The whole thing has escalated at a breakneck pace since Sunday night. Lighthizer has also stated that although the talks are still notionally on, the tariffs are going to be hiked by Friday and it is unlikely that any new trade talks are going to improve the situation unless the Chinese make good on the agreements. After Donald Trump had made his statements, the initial reaction in China was that the delegation that was going to visit Washington DC was going to cancel the next round of talks. However, it seems better sense has prevailed, and the Chinese Foreign Ministry has gone on record stating that the talks are very much on. A spokesperson for the ministry said, “What I can tell you is that China’s team is preparing to go to the United States for the discussions.”