WASHINGTON: US
President Donald Trump cranked up the heat in a trade battle with China on
Friday, ordering a tariff hike on almost all remaining imports from the world's
second-biggest economy, but Beijing said talks would continue to resolve the
row. After tweeting that two days of trade talks in Washington had been
"candid and constructive," the businessman-turned-politician changed
tack and followed through on a threat he had been making for months.

"The
President... ordered us to begin the process of raising tariffs on essentially
all remaining imports from China, which are valued at approximately $300
billion," US Trade Representative Robert Lighthizer said in a statement.
The move came less than 24 hours after Washington increased punitive duties on
$200 billion worth of Chinese imports, raising them to 25 percent from 10
percent, days after the Trump administration accused Beijing of reneging on its
commitments.

Details on the
process for public notice and comment will be posted Monday, ahead of a final
decision on the new tariffs, Lighthizer said. They were not expected to go into
effect for several months. China's top trade negotiator, Vice Premier Liu He,
had warned earlier that Beijing "must respond" to any US
tariffs.  The developments came as two
days of talks to resolve the trade battle ended Friday with no deal, but no
immediate breakdown either, offering a glimmer of hope that Washington and Beijing
could find a way to avert damage to the global economy.

"Over the
course of the past two days, the United States and China have held candid and
constructive conversations on the status of the trade relationship between both
countries," Trump tweeted. "The relationship between President Xi
(Jinping) and myself remains a very strong one, and conversations into the
future will continue." The tariffs on China "may or may not be
removed depending on what happens with respect to future negotiations!"

Liu told
reporters the talks had been "productive" and said the two sides
would meet again in Beijing at an unspecified date, but he warned that China
would make no concessions on "important principles."
"Negotiations have not broken down, but rather on the contrary, this is
only a normal twist in the negotiations between the two countries, it is
inevitable," Liu said. The seemingly positive messages-coming before the
announcement that Trump had ordered the latest round of tariffs-had cheered
Wall Street with shares rising after being under pressure all week.

US Treasury
Secretary Steven Mnuchin and Lighthizer met for about two hours with Liu on
Friday and then headed for the White House to brief Trump, who had said he was
in no hurry to reach a deal, arguing the United States was negotiating from a position
of strength. "We have a consensus in lots of areas but to speak frankly
there are areas we have differences on, and we believe these concern big
principles," Liu said.

Liu pointed to
three major areas of disagreement: whether to cancel all trade war tariffs when
an agreement is reached, the exact size of Chinese purchases of US goods, and a
"balanced" agreement text. "Any country needs its own dignity,
so the text must be balanced," Liu said. Liu and his backer Xi cannot be
seen as giving in too much with trade concessions to the US in fear of
triggering comparisons to past "unequal treaties" forced on China in
the 19th and 20th centuries. "Every country has important principles, and
we will not make concessions on matters of principle," Liu said.

'Darkness before
dawn'

Yang Delong,
chief economist at First Seafront Fund Management in Shanghai, told AFP that
the "sudden hardening" of Trump's tone is likely linked to the 2020
US presidential election. "The US hopes China will make greater concessions
in many areas, these concessions might harm a foundation of our economic
development or impact our institutional reform," Yang said.

"When it
comes to core interests China is not able to yield," he said. Washington
is pressing China to change its policies on protections for intellectual
property, as well as massive subsidies for state-owned firms, and to reduce the
yawning trade deficit. After weeks of rising optimism about the chances for an
agreement, the tone out of the White House has veered from anger to
nonchalance.

In a series of
early morning tweets Friday, Trump said there was "absolutely no need to
rush" towards a deal. 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,
weighing on both countries' economies.

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. Liu compared the negotiations to a
marathon: "When you get to the last stage it is comparatively the hardest
stage, now we need to hold on, it is the darkness before dawn." - AFP