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US-China talks stop, US raises tariffs

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US and China trade talks have broken up with no agreement, hours after President Donald Trump more than doubled tariffs on Chinese imports.

Trade talks between the US and China have broken up with no agreement, hours after President Donald Trump more than doubled tariffs on $US200 billion ($A286 billion) in Chinese imports.

Trump asserted on Twitter that there was "no need to rush" to get a deal between the world's two biggest economies and later added that the tariffs "may or may not be removed depending on what happens with respect to future negotiations."

A White House official, speaking on condition of anonymity because they were not authorised to speak publicly on the matter, confirmed that the talks had concluded for the day but could not say when they would resume.

Hours earlier, the Trump administration hiked tariffs on $200 billion worth of Chinese imports to 25 per cent from 10 per cent, escalating tensions between Beijing and Washington. China's Commerce Ministry vowed to impose "necessary countermeasures" but gave no details. 

The tariff increase went ahead even after American and Chinese negotiators briefly met in Washington on Thursday and again on Friday, seeking to end a dispute that has disrupted billions of dollars in trade and shaken global financial markets.

After a short session on Friday, the lead Chinese negotiator, Vice Premier Liu He, left the Office of the US Trade Representative about midday. US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin shook hands with Liu as he left.

In the afternoon, a motorcade of sport-utility vehicles and a police escort, both with lights flashing, carried the Chinese delegation away from their lodgings at the Willard InterContinental Hotel.

Hu Xijin, editor-in-chief of the Chinese newspaper Global Times, citing "an authoritative source," tweeted that "talks didn't break down. Both sides think that the talks are constructive and will continue consultations. The two sides agree to meet again in Beijing in the future." 

In an interview with reporters later in the day, Vice Premier Liu He said: "We will make no concessions on matters of principle."

The Trump administration escalated the confrontation again after the Chinese delegation left town. Lighthizer announced Friday evening that he was preparing to impose tariffs on the $300 billion in Chinese imports that haven't already been targeted. The government will have to get public comment before it can target more Chinese goods.

On Wall Street, stocks fell initially Friday but turned positive on optimism over future talks.

From anger to hope

Trump began the standoff because of complaints about unfair Chinese trade practices. The United States is pressing China to change its policies on protections for intellectual property, as well as massive subsidies for state-owned firms, and to reduce the yawning trade deficit.

After weeks of rising optimism about the chances for an agreement, the tone out of the White House has veered from anger to nonchalance. 

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Expert: Tariff hikes will cause consumer pain
Expert: Tariff hikes will cause consumer pain

On 5 May, Trump erupted on Twitter, saying the talks were progressing "too slowly," accusing the Chinese of backing out of commitments and announcing the tariff increase.

But in a series of early morning tweets Friday, he said there was "absolutely no need to rush."

Bloomberg quoted two sources saying Washington gave Beijing three to four weeks more to reach an agreement before the Trump administration moves to carry out a threat to impose tariffs on all Chinese imports.

The US leader continues to argue that tariffs could in some ways be preferable to reaching a trade deal.

"Tariffs will bring in FAR MORE wealth to our country than even a phenomenal deal of the traditional kind," Trump wrote.

Economists stress that duties are paid by US companies and consumers and result in higher prices, while farmers and manufacturers complain about the loss of markets for their exports due to retaliation from China and other targets of Trump's trade wrath.

'No one wins'

"NO ONE WINS A TRADE WAR," trade analyst Chad Bown of the Peterson Institute for International Economics said on Twitter.

Since last year, the United States and China have exchanged tariffs on more than $360 billion in two-way trade, gutting US agricultural exports to China and weighing on both countries' manufacturing sectors.

The higher duty rates imposed on Friday will hit a vast array of Chinese-made electrical equipment, machinery, auto parts and furniture, and will apply to goods that left port after midnight Washington time.

"While we are disappointed that the stakes have been raised, we nevertheless support the ongoing effort by both sides to reach agreement on a strong, enforceable deal that resolves the fundamental, structural issues our members have long faced in China," said business lobby the American Chamber of Commerce in China.

Oxford Economics estimates the "tariff punch" from all existing duties will cut 0.3 percentage points off US growth and warns recession risks are on the rise. Economists in China estimate a similar impact.

The International Monetary Fund has sounded the alarm that the conflict and the loss of confidence it creates will have a wider impact on the global economy and is a major risk to growth.

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