Trade talks between the US and China end without a deal, but negotiators from both sides say they held "constructive" talks that went "fairly well" after the US raised tariffs on $200 billion in Chinese goods and Beijing promised to retaliate.

Chinese Vice Premier Liu He (L) shakes hands with US Trade Representative Robert Lighthizer (R) alongside US Treasury Secretary Steven Mnuchin (C) as Liu leaves the Office of the United States Trade Representative after trade negotiations in Washington, DC, May 10, 2019.
Chinese Vice Premier Liu He (L) shakes hands with US Trade Representative Robert Lighthizer (R) alongside US Treasury Secretary Steven Mnuchin (C) as Liu leaves the Office of the United States Trade Representative after trade negotiations in Washington, DC, May 10, 2019. (AFP)

Trade talks between the US and China broke up Friday with no apparent agreement, and President Donald Trump asserted that there was "no need to rush" to get a deal between the world's two biggest economies.

After a short session on Friday, the lead Chinese negotiator, Vice Premier Liu He, left the Office of the US Trade Representative about midday. 

US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin shook hands with Liu as he left.

Reporters at the scene sent out tweets quoting Mnuchin as saying the two countries had held "constructive discussions." Neither the Treasury nor the trade representative's office responded to repeated requests for comment.

Hu Xijin, editor-in-chief of the Chinese newspaper Global Times, citing "an authoritative source," tweeted that "talks didn't break down. Both sides think that the talks are constructive and will continue consultations. The two sides agree to meet again in Beijing in the future."

"They were constructive discussions between both parties, that's all we're going to say," Mnuchin was quoted as saying by CNBC following a two hour negotiating session.

At his hotel, Liu told reporters that the talks had gone "fairly well," according to Bloomberg, which nevertheless cited sources saying little progress had occurred.

TRT World's Lionel Donovan has more on it.

Later Trump said the US-China trade talks were "candid and constructive," but no deal was reached as new tariffs kicked in.

Trump said he "may or may not" remove the tariffs imposed on Chinese goods, "depending on what happens with respect to future negotiations!"

In an upbeat pair of tweets, Trump also said, "The relationship between President Xi (Jinping) and myself remains a very strong one."

Tariff hike on $200B of Chinese goods 

Hours earlier, the Trump administration hiked tariffs on $200 billion worth of Chinese imports to 25 percent from 10 percent, escalating tensions between Beijing and Washington. China's Commerce Ministry said it would impose "necessary countermeasures" but gave no details.

The increase went ahead even after American and Chinese negotiators briefly met in Washington on Thursday and again on Friday, seeking to end a dispute that has disrupted billions of dollars in trade and shaken global financial markets. 

Trump also said on Friday he was in no hurry to reach a deal with Beijing, arguing the United States was negotiating from a position of strength.

After weeks of rising optimism, the tone out of the White House has veered to anger and then nonchalance.

On May 5, Trump erupted on Twitter, saying the talks were progressing "too slowly," accusing the Chinese of backing out of commitments and announcing the tariff increase.

But in a series of early morning tweets on Friday, he said, "Talks with China continue in a very congenial manner – there is absolutely no need to rush – as Tariffs are NOW being paid to the United States by China."

The US leader continues to argue that tariffs could in some ways be preferable to reaching a trade deal.

"Tariffs will bring in FAR MORE wealth to our country than even a phenomenal deal of the traditional kind," Trump wrote.

Since last year, the United States and China have exchanged tariffs on more than $360 billion in two-way trade, gutting US agricultural exports to China and weighing on both countries' manufacturing sectors.

Trump began the standoff because of complaints about unfair Chinese trade practices.

The US is pressing China to change its policies on protections for intellectual property, massive subsidies for state-owned firms, and to reduce the yawning trade deficit.

Lighthizer and Mnuchin met the Chinese delegation for about 90 minutes on Thursday evening and then had a working dinner with Liu.

TRT World spoke with Joseph Faudy, Associate Professor of Economics at NY University, for more. 

'No one wins'

Liu had said on Thursday on his arrival in Washington that the prospects for the talks were "promising" but warned raising tariffs would be "harmful to both sides."

"I hope to engage in rational and candid exchanges with the US side," he told Chinese state media.

The higher duty rates imposed on Friday will hit a vast array of Chinese-made electrical equipment, machinery, auto parts and furniture.

But due to a quirk in their implementation, products already on ships headed for US ports before midnight will only pay the 10 percent rate.

That could effectively provide a short grace period for the sides to avert an even more serious escalation.

"While we are disappointed that the stakes have been raised, we nevertheless support the ongoing effort by both sides to reach agreement on a strong, enforceable deal that resolves the fundamental, structural issues our members have long faced in China," said business lobby the American Chamber of Commerce in China.

Economists stress that duties are paid by US companies and consumers and result in higher prices, while farmers and manufacturers complain about the loss of markets for their exports due to retaliation from China and other targets of Trump's trade wrath.

"NO ONE WINS A TRADE WAR," trade analyst Chad Bown of the Peterson Institute for International Economics said on Twitter.

A Chinese central bank advisor told state-run Financial News that Trump's tariff hike and Chinese retaliation would lower economic growth by 0.3 percentage points.

It is "within a controllable range," the advisor Ma Jun said.

Oxford Economist estimates the same magnitude of slowdown in the US economy, and is warning that recession risks are on the rise.

But the International Monetary Fund has sounded the alarm that the conflict and the loss of confidence it creates will have a wider impact on the global economy and is a major risk to growth.

American shoppers to feel the pinch

Gary Shapiro, chief executive of the Consumer Technology Association said the tariffs would be paid by American consumers and businesses, not China, as Trump has claimed.

"Our industry supports more than 18 million US jobs – but raising tariffs will be disastrous," Shapiro said in a statement. 

"The tariffs already in place have cost the American technology sector about $1 billion more a month since October. 

That can be life or death for small businesses and startups that can’t absorb the added costs ." 

Economists and industry consultants have said it may take three or four months for American shoppers to feel the pinch from the tariff hike but retailers will have little choice but to raise prices on a wide range of goods to cover the rising cost of imports before too long, according to economists and industry consultants. 

Source: TRTWorld and agencies