Trump Threatened Tariffs After Hearing of Chinese Reversal, Sources Say

Trump says he'll raise tariffs on $200bn of Chinese goods

China said on Monday that a delegation was still preparing to go to the United States for trade talks, even as U.S. President Donald Trump dramatically increased pressure on Beijing to reach a deal, saying he would hike tariffs on Chinese goods this week.

According to two sources who spoke to CNBC, China's trade delegation may back out of negotiations after Trump threatened to increase existing tariffs on hundreds of billions worth of Chinese goods entering the country - the first tranche potentially as soon as Friday.

The president then issued a pair of tweets on Sunday criticizing China and threatening to raise tariffs on about $200 billion in goods to 25 percent from 10 percent.

Chinese officials are expected to come to Washington for trade talks on Wednesday.

Trump announced Sunday that his administration would be increasing tariffs Chinese goods worth hundreds of billions, crediting past tariffs for the recent US economic boom. A February study published by the Trade Partnership estimated that slapping 25 percent tariffs on all remaining non-tariff Chinese imports-which is exactly what Trump threatened to do on Sunday-would cost more than 2.1 million American jobs, reduce the size of the USA economy by more than 1 percent, and cost the average family of four about $2,200.

He said: "The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!"

"No!" the President of the United States added. The U.S. releases the April CPI report Friday.South Korea's markets are closed Monday for a holiday. "It's looking very good", Trump had said.

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The two sides have been locked in intense negotiations since a year ago for an agreement to address USA concerns over China's trade surplus, alleged theft of intellectual property and forced technology transfers. For that reason, if he wants to convince the Chinese he's for real, he'll actually have to impose them for real. Hong Kong's Hang Seng index sank 2.9% to 29,209.82.

It was unclear whether the threat reflected deeper concerns by Trump, who stunned North Korean leader Kim Jong Un by walking away from their nuclear summit in February, or a negotiating tactic. St. Louis Federal Reserve Bank President James Bullard and Chicago Fed President Charles Evans, both policy voters this year, expressed caution Friday over weak prices and said the central bank may have to act to lift inflation out of a persistently low trend. Broadcom's Chinese revenue is 48% of its total and Apple gets almost one-fifth of its revenue from world's second largest economy.

But Michael Pillsbury, an informal trade adviser to Mr Trump, said he took the president's tweet "at face value".

The two countries have been trying to resolve disputes over intellectual property theft and forced technology transfers.

"China may have appeared less willing to offer additional concessions", said Citigroup economists in a report. "People are realizing that if talks are still continuing there's a chance that this escalation can once again de-escalate", she said.

"An increase in tariffs would be bad news for risk assets and would [threaten] the prospect of a global growth recovery", he said.

The United States imposed a 10% tariff on more than $200 billion (€178 billion) in Chinese goods last September.

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