China calls on United States to be ‘cool-headed’ in trade war


Robert Lighthizer, US Trade Representative, told Reuters that President Donald Trump directed a higher 25 percent tariff from an earlier proposed 10 per cent, because of Beijing's refusal to meet US demands and has imposed retaliatory tariffs.

Michael Pillsbury, director of the Centre for Chinese Strategy at the Hudson Institute, a conservative think tank in Washington, said at an event in Beijing on Monday that despite the dispute between the U.S. and China, the relationship between Presidents Donald Trump and Xi Jinping was strong.

During a hearing last week on the $16 billion tranche of tariffs, representatives from United States industries decried the indiscriminate selection process for identifying which products would be subjected to the trade sanctions, with some warning of dire consequences should tariffs be imposed on an additional $200 billion worth.

The US government is now discussing and taking comments on the implications of these tariffs from key industry figures who are campaigning for the tariffs to be dropped or removed altogether until the 17th of August. "If the U.S. takes further actions to escalate, China will retaliate, resolutely protecting our fair and legitimate rights", he added.

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"We don't have anything to announce today about a specific event, or a specific round of discussions, but communication remains open and we are trying to figure out whether the conditions present themselves for a specific engagement between the two sides", one of the officials said.

China said on Wednesday that "blackmail" would not work and that it would hit back if the United States takes further steps hindering trade, including applying the higher tariff rate.

The next wave of US tariffs is set to kick in as soon as Wednesday, with the possible imposition of duties on another $16 billion of Chinese imports.

Complicating Mnuchin's efforts is a harder line taken by Lighthizer, who has jurisdiction over the U.S.'s 301 investigation that sparked the tariffs.

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Trump's ongoing trade dispute with China has put him at odds with members of his own party and the U.S. business community, who have expressed outrage about the protectionist bent of his administration's trade policies, and warned of negative consequences for the U.S. economy. "It adds to inflation pressure and interest rates and [would] strengthen the dollar, which makes trade situation even worse" for the US, he said.

The tariffs could not go into effect until September, the officials said, and no final decision had been made on whether to impose the tariffs. The outlines of the deal are still sketchy, but they call for the Europeans to buy more American petroleum, soybeans and manufactured goods and for Trump to reduce his vehicle and steel tariffs.

U.S. trade representative Robert Lighthizer.

China says the United States is trying to stop the rise of a competitor and it has imposed its own tariffs on USA goods.

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Last month, the administration imposed a 25 percent tariff on $34 billion worth of Chinese goods, mostly machines and components.