The US-China trade talks are at risk of breakdown

JUST AS it looked like America and China were close to a deal, President Donald Trump has brought the two countries back to the brink of a full-fledged trade war. In a pair of tweets late on May 5th he threatened to slap 25% tariffs on all Chinese imports, a rate that applies to only a much smaller portion of imports now. The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No! he said. Only a month ago he had trumpeted that an epic deal was in the works. The sudden shift in tone rattled investors in Asia, and most of all in China. The CSI 300, an index of major Chinese stocks, fell by nearly 6% on May 6th, its worst day in more than three years.The first question is what the fallout will be for trade talks. Intensified meetings in recent weeks had fuelled the impression that an agreement was in the offing. American negotiators, led by Robert Lighthizer, the United States Trade Representative, were in Beijing last week. This week Liu He, a Chinese vice-premier, was due to lead a delegation of dozens of high-level Chinese officials on a trip to Washington for the next round of discussions. Observers had started to scrutinise Mr Trumps public schedule to find gaps when Xi Jinping, Chinas president, might meet with him to sign their pact. June looked like a good option. Few would bet on that today.
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