Trump threatens China with higher tariffs to reach trade deal

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President Trump and Treasury Secretary Steve Mnuchin, second from right, listening to remarks by Chinese President Xi Jinping during a bilateral meeting at the G20 Summit in December 2018.

CNBC cited its own sources on May 1, that "U.S. and China may announce a trade deal by next Friday [May 10]".

In the bilateral consultations, Washington and Beijing are trying to work out a mutually acceptable trade agreement that would put an end to an nearly year-long tariff war between the world's largest economies.

The administration repeatedly has suggested that the negotiators were making progress.

Fears about a further escalation caused a slump in world stock markets towards the end of a year ago.

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Trump's announcement comes ahead of another round of talks between USA and Chinese officials in Washington scheduled for this week. White House spokeswoman Sarah Sanders said Thursday.

Washington will also soon impose 25 percent tariffs on other Chinese goods worth $325 billion, the president noted.

That increase will now go into effect on Friday, Trump said in a tweet. The president has continually said America is getting the short end of the stick when it comes to our trade agreements with China.

But a March study by economists from the Federal Reserve Bank of New York, Columbia University, and Princeton University found that the burden of Mr. Trump's tariffs - including taxes on steel, aluminum, solar panels, and Chinese imports - falls entirely on USA consumers and businesses who buy imported products.

Sunday's announcement casts into doubt previous expectations that China and the United States were closing in on a deal to end a months-long trade war that has slowed global growth and disrupted markets.

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An escalation in the trade war "likely [means a] risk-off to start the week as China returns from the extended May Day holiday", said Marc Chandler, chief market strategist at Bannockburn Global Forex.

White House economic adviser Larry Kudlow told Fox News that the president's tweet was a warning to the Chinese.

He'd twice pushed back deadlines - in January and March - to raise the tariffs in a bid to buy more time for a negotiated settlement.

This week, the two sides were scheduled to meet in what would have been a final round of talks before a potential deal.

But Michael Pillsbury, an informal trade adviser to Trump and the director for Chinese strategy at the Hudson Institute, said Kudlow's remarks downplayed the president's intent.

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