Xi invites the United States, China to work together but the tariff increase applies

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The grace period was not applied to the three previous tariff cycles imposed last year on Chinese goods, which had much longer notice periods of at least three weeks before the duties took effect.

The United States and China have concluded the first of two days of talks to save a trade deal that is near collapse on Thursday.

The tension between Washington and Beijing increased after a halt in last week's negotiations, when China revised a draft agreement and weakened commitments to meet US demands.

But on Thursday Trump said he received "a nice letter" from Chinese President Xi Jinping and could talk to him on the phone, although he did not say if this would happen before the deadline.

Trump said Xi's message was, "Let's work together, see if we can do something."

To try to avoid Trump's growing duties on $ 200 billion of Chinese assets, 25% from 10%, Xi sent Vice Premier Liu He to negotiate with US trade representative Robert Lighthizer and Treasury Secretary Steven Mnuchin. They spoke for 90 minutes Thursday and should have resumed their Friday talks.

Liu He, Chinese vice premier, salutes as he leaves the trade talks in Washington on Thursday.

Liu He, Chinese vice premier, salutes as he leaves the trade talks in Washington on Thursday.Credit:Bloomberg

Trump on Thursday targeted the $ US325 billion of Chinese assets that are still intact from the trade war, saying it was preparing to tax those with a 25% punitive rate.

The President of "America First" claims to be trying to rebalance global trade and strengthen US production, accuses Beijing of denying the commitments made during months of negotiations.

"We were getting very close to an agreement, then they started renegotiating the agreement, we can't have it, we can't have it," Trump said during an event at the White House.

The US representative, Robert Lighthizer, left, and Treasury Secretary Steven Mnuchin return to the White House after the talks.

The US representative, Robert Lighthizer, left, and Treasury Secretary Steven Mnuchin return to the White House after the talks.Credit:AP

Trump said that if the two sides can't make a deal, the United States would go back to producing products that China now produces. He didn't say how it would force American factories to manufacture those products.

China has promised to retaliate "in kind" if the increased tariffs become effective.

Along with the planned increase for Friday, the president also threatened to extend the tariffs to all $ 540 billion in annual Chinese imports.

The president had delayed the increase planned on two previous occasions to give the negotiators time to enter into an agreement that would include massive purchases of American products and structural changes in the China-led economy.

Chinese President Xi Jinping and his US counterpart Donald Trump in 2017.

Chinese President Xi Jinping and his US counterpart Donald Trump in 2017.Credit:AP

After more than five months of accelerated diplomacy, following a Trump-Xi dinner in December at the top of the Group of 20 in Buenos Aires, some fundamental questions remain to be resolved.

Chinese negotiators insist that all tariffs imposed by the United States last year be eliminated in any agreement.

Reuters, Washington Post

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