Hours after Bloomberg reported that Beijing and Washington are working towards a resumption of trade talks, the Wall Street Journal reported that the two countries have "yet to make meaningful progress" moving forward from an impasse, as the next wave of US tariffs are set to hit as soon as Wednesday.
Treasury Secretary Steven Mnuchin and Chinese envoy Liu He and their staffs continue to talk about a possible meeting, said officials in both capitals, but the talks remain at a very preliminary stage. Both sides argue that it is up to the other to make the first move after several preliminary Chinese offers, mainly involving the purchase of more U.S. goods, were rejected by President Trump as inadequate.
The two sides have agreed that their initial offers weren’t a solid base for further negotiations, according to a senior member of the U.S. business community tracking the discussions. Those included the Chinese offer to buy more U.S. exports, and the U.S. demand that China essentially scrap the industrial policy that turned it into an economic powerhouse, the senior executive said. -WSJ
But wait - now Bloomberg reports that the Trump administration is set to increase a proposed 10% tariff on $200 billion in Chinese imports to 25% - "ratcheting up pressure on Beijing to return to the negotiating table." If enacted, it would mean overall tariffs of $505 billion on Chinese imports.
The U.S. imposed 25 percent tariffs on $34 billion of Chinese products in early July, and the review period on another $16 billion of imports ends Wednesday. President Donald Trump has threatened an additional $200 billion with levies of 10 percent, a level the administration may raise to 25 percent in a Federal Register notice in coming days, one of the people said. The change isn’t final yet and may not go forward after a public review, the people said. -Bloomberg
Here's what the market thought after hours - completely wiping out the gains from Apple's earnings announcement:
The Yuan, meanwhile, reversed on the news:
“They are discarding useless ideas and rhetoric,” the executive said. “They are figuring out what could be on an agenda and what could be a solution.”
Mnuchin told during last week's G20 meeting in Buenos Aires that his team and members of the Chinese delegation had engaged in "chitchat," while former US officials, including former Treasury Secretary Hank Paulson (Mnuchin's old boss at Goldman Sachs), have urged Washington and Beijing to move forward with discussions as soon as possible.
Last week's tentative trade accord with the European Union has emboldened the Trump administration, after the two sides agreed to go through the World Trade Organization to handle intellectual property theft cases, government pressure on companies for technology transfers and the operation of state-owned industries: all code for alleged infractions committed by China. ...