China is likely to cancel its planned trade talks with the United States after tensions appeared to flare again following U.S. President Donald Trump’s Twitter threats regarding tariffs.
On Sunday, Trump tweeted that he’d increase tariffs on Chinese goods exports to the U.S. The first of the tariffs could come as soon as Friday.
Now according to CNBC, which quotes sources close to the Chinese delegation, China may be looking at canceling the scheduled negotiations.
According to the report, a source suggested that a delegation led by Chinese Vice Premier Liu He may not attend the talks slated for Friday this week. The Chinese team included 100 people that were set to participate in the talks.
At the same time, another source told the publication that the tariff hike Trump had tweeted about- from 10 percent to 25 percent on Chinese goods worth $200 billion- was only meant to jolt Liu and his team not to make the U.S. talks with what has been termed as “empty offers.”
The sentiments also mirror similar suggestions reported on in the Wall Street Journal, with the re-escalation in trade tensions and potential derailment of talks being attributed to president Trump’s tweets.
Other than the 15 percent spike on current tariffs for the $200 billion batch, the U.S. president also noted that a 25 percent tariff would “shortly” apply to Chinese goods worth a further $325 billion.
Evidently, the twist and maybe eventual cancellation, has not helped financial markets. Already Monday has seen the tensions eat into the markets with losses of more than 1 percent witnessed across the U.S. stock futures market, the Asian stocks markets, and Chinese commodity futures.
The tensions have also seen currencies take hits, the Yuan the worst affected. According to Bloomberg, the decline has caught “options traders off guard.”
Others like the Australian have also seen sharp declines. The Japanese yen, which has a reputation as a safe haven, remained strong, even as Japanese markets remained closed for holidays until Tuesday.