Donald Trump said he would impose new tariffs on Chinese goods on Friday since the Washington-Beijing trade talks ended without an agreement.
However, China and the United States have agreed to hold further trade talks in the near future, said Vice Premier Liu He, who was optimistic that an agreement could be reached, but there are "policy issues" on which China would not do so.
In the meantime, President Trump ordered his chief of trade to impose tariffs on all remaining imports from China by levying taxes on Chinese goods worth $ 200 billion – an attempt to save a trade agreement.
Trump issued orders to raise the tariff, saying China broke the deal by failing to meet previous commitments made during months of negotiations.
"The negotiations have not failed," said Liu, China's chief negotiator in the talks, according to state television.
Chinese Vice Premier Liu He (left) says goodbye to Washington Treasury Secretary Steve Mnuchin (center) and US Trade Representative Robert Lighthizer (right) in Washington, DC on Friday
“On the contrary, I think small setbacks are normal and inevitable in the negotiations between the two countries. We're still cautiously optimistic about the future, ”said Liu.
China is firmly against the recent US tariff increase and must respond as a nation, Liu told a small group of Chinese reporters in the video clip.
“At the moment, both sides have reached mutual understanding on many things, but frankly there are differences. We believe these differences are important policy issues, ”said Liu.
"We can make absolutely no concessions on such fundamental issues."
He added that the talks would continue in Beijing, but did not provide details.
However, Trump emphasized the lack of progress in the talks and ordered a further escalation of the tariffs.
Trump's move would impose punitive tariffs on Chinese imports worth $ 300 billion, U.S. trade representative Robert Lighthizer said in a statement.
According to Lighthizer, a final decision has not yet been taken on the new tariffs, which would add to an increase in the customs duty early Friday from 10% to 25% for Chinese imports worth USD 200 billion.
There are still three differences between the two countries, according to China's recent talks.
One of them is about tariffs, said Liu, according to a transcript of the questions and answers released by Phoenix, a Hong Kong-based television station near Beijing.
China believes that tariffs were the origin of the trade dispute and that if both sides wanted to reach agreement, all tariffs must be removed, Liu said.
The second concerns procurement, where a first consensus was reached between the heads of state and government of the two Argentine countries at the end of last year.
The two sides now have different views on the volumes, Liu said.
The third point is how balanced the text of the draft contract should be, he said.
"Every nation has its dignity, so the text should be balanced," said Liu.
President Trump ordered his chief of commerce to begin imposing tariffs on all remaining imports from China after talks on a new trade agreement ended without agreement
Sources told Reuters this week that China has canceled its draft treaty obligation to amend laws to resolve core US complaints: theft of US intellectual property and trade secrets; forced technology transfer; Competition policy; Access to financial services; and currency manipulation.
Liu denied allegations that China had failed to keep its promise and said China considered it normal to make changes before a final deal was reached.
Both sides had different views on how to phrase it, he said.
Liu said he hoped that this problem would be resolved so that it was unnecessary to "overreact" to this point.
Like Liu, Chinese state media said China would not give in to its core interests.
“China clearly demands that trade procurement figures are realistic. The text must be balanced and expressed in terms that are acceptable to the Chinese people and do not undermine the sovereignty and dignity of the country, ”said the ruling Communist Party's official paper in a comment on Saturday.
The trade war has strained the Chinese economy.
When asked about domestic concerns about how the recent tariffs could continue to put pressure on the economy, Liu expressed longer-term optimism about China's economy, adding that it had started an upward cycle after bottoming out last year.
He said he believes that despite some downward pressure, the Chinese economy will maintain a stable and healthy trend and that China has ample room for fiscal and monetary maneuvers.
On Monday, hours after Trump announced plans to increase tariffs, the Chinese central bank reduced the reserves that some small and medium-sized banks must hold and released more funds to lend to companies in need of cash.
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