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Trade war

On eve of trade talks, Trump says China 'broke the deal'

US president cranks up the rhetoric as Beijing's negotiators head to Washington

U.S. President Donald Trump delivers a speech to supporters at a rally in Panama City, Florida on Wednesday.   © Reuters

WASHINGTON/BEIJING -- In a blunt offensive against China a day before the resumption of trade talks, U.S. President Donald Trump accused Beijing of breaking a deal the two countries were working on.

Speaking to supporters in Florida on Wednesday night, Trump said: "They broke the deal. So they're flying in. The vice premier tomorrow is flying in, but they broke the deal. They can't do that. So they'll be paying. If we don't make the deal, nothing wrong with taking in more than $100 billion a year."

The ratcheting up of the rhetoric came after the U.S. issued an official notice Wednesday stating that it would raise tariffs on $200 billion in Chinese goods starting Friday. China's Commerce Ministry, meanwhile, issued a statement saying it had no choice but to take necessary retaliatory measures if Washington were to raise tariffs.

The Office of the U.S. Trade Representative said the additional duties imposed in September will rise to 25% from 10%, according to a notice posted in the Federal Register. The mandatory notice was issued a day later than expected, likely to give Washington more time to gauge Beijing's response to Trump's initial threat made Sunday.

White House spokeswoman Sarah Sanders told reporters on Wednesday that the U.S. has received an "indication" from China that it wants to make a trade deal.

China is proceeding with the talks, despite previously insisting it would not negotiate with the U.S. holding the threat of tariffs over its head. But the meeting has been shortened to two days from three, and Beijing is expected to send a smaller delegation than the 100 people it originally planned.

Vice Premier Liu He, China's lead negotiator, will not hold the status of "special envoy" for President Xi Jinping as he did during talks in February, raising questions as to how much authority he will have to make decisions.

In the Commerce Ministry statement, China said that it "deeply regrets" the U.S. plan to raise tariffs, and noted that the escalation of trade frictions are "not in the interest of either country or the world."

Trump blamed the impasse on Beijing reneging on earlier commitments, taking a jab Wednesday at his domestic political opponents in the process while signaling that he would be pleased to maintain the status quo.

"The reason for the China pullback & attempted renegotiation of the Trade Deal is the sincere HOPE that they will be able to 'negotiate' with Joe Biden or one of the very weak Democrats, and thereby continue to ripoff the United States (($500 Billion a year)) for years to come," he tweeted. "Guess what, that's not going to happen!"

"We'll see" whether a deal can be made, Trump continued, but reiterated his long-held stance that he is "very happy" that tariffs are "filling U.S. coffers" and that this was "great for U.S., not good for China!"

Beijing, which is compromising merely by participating in the talks, is leery of making further concessions on issues such as state subsidies to core industries -- a major U.S. complaint -- as this could be taken domestically as a sign of weakness.

The Chinese side "will never compromise on matters of principle," the state-run Xinhua News Agency wrote in an editorial Tuesday.

As for the U.S., the tariff increase has drawn vocal opposition from business groups, but Trump's tough stance on China holds bipartisan support in Congress.

"Although the Chinese delegation decided to go to the U.S. for negotiations, as far as I know, the situation is more tense than the Western media speculated," Hu Xijin, editor-in-chief of the Chinese Communist Party-run Global Times, tweeted Tuesday night. "The possibility of an escalation of China-US trade war is seriously increasing."

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