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China still 'cautiously optimistic' on holding trade talks with United States despite new tariffs, says Vice-Premier Liu He

Beijing/Washington: China and the United States have agreed to hold more trade talks in Beijing, Vice Premier Liu He said as US President Donald Trump ordered his trade chief to begin the process of imposing tariffs on all remaining imports from China.

Liu voiced a measured optimism on reaching a deal, but said there were "issues of principle" on which China would not back down.

"Negotiations have not broken down," Liu, China’s chief negotiator in the talks, said in Washington on Friday, according to state television on Saturday. "Quite the opposite, I think small setbacks are normal and inevitable during the negotiations of both countries. Looking forward, we are still cautiously optimistic," Liu said.

 China still cautiously optimistic on holding trade talks with United States despite new tariffs, says Vice-Premier Liu He

File image of Vice Premier Liu He. Reuters

Liu’s optimism was tempered by US Treasury Secretary Steven Mnuchin, who told CNBC on Friday that there were no further talks with China planned “as of now.”

Trump wrote on Twitter on Saturday that he thinks China felt they were being "beaten so badly" in the recent negotiations that they may as well wait for the 2020 presidential election "to see if they could get lucky and have a Democrat win - in which case they would continue to rip-off the USA for $500 Billion a year.”

“The only problem is that they know I am going to win,” Trump wrote on Twitter, “... and the deal will become far worse for them if it has to be negotiated in my second term. Would be wise for them to act now, but love collecting BIG TARIFFS!”

The United States escalated a tariff war with China on Friday by hiking levies on $200 billion worth of Chinese goods in the midst of last-ditch talks to rescue a trade deal. Trump had delayed the tariffs as negotiations between Washington and Beijing were progressing.

On Friday, Trump issued orders for the tariff increase, saying China “broke the deal” by reneging on earlier commitments made during months of negotiations.

China strongly opposes the latest US tariff hike, and as a nation, has to respond to that, Liu told a small group of Chinese reporters in the video clip.

"Right now, both sides have reached mutual understanding in many things, but frankly speaking, there are also differences. We think these differences are significant issues of principle," Liu said. “We absolutely cannot make concessions on such issues of principle.”

He added that talks would continue in Beijing, but gave no details. Underscoring a lack of progress in the talks, Trump ordered a further escalation of tariffs.

Trump’s move would subject about $300 billion worth of Chinese imports to punitive tariffs, U.S. Trade Representative Robert Lighthizer said in a statement on Friday. Lighthizer said a final decision has not been made on the new duties, which would come on top of an early Friday tariff rate increase, to 25% from 10%, on $200 billion worth of Chinese imports.

China’s widely-read Global Times newspaper, which while published by the ruling Communist Party’s official People’s Daily newspaper does not speak for the government, said in a Sunday editorial that the United States has “seriously underestimated China’s endurance”.

“Washington tried to bring up terms that either harmed the sovereignty and dignity of China, or that were seriously unequal and unrealistic. Those requests have made the negotiations more difficult,” the paper said.

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Updated Date: May 12, 2019 11:10:43 IST