U.S. will suffer from tariffs, Trump aide Larry Kudlow admits

U.S. President Donald Trump and Chinese President Xi Jinping meet after the G20 in Buenos Aires

U.S. will suffer from tariffs, Trump aide Larry Kudlow admits

One of Donald Trump's top economic advisers has acknowledged the president was wrong to suggest that China would pay tariffs on its exports to the US.

"Imagine that happening with phones, or cars, in any number of industries, and you'd have the world splitting along lines we can't foresee - would they occur in Germany?"

Beijing matched Trump's earlier 25% tariff on $50 billion of American goods.

The Chinese foreign ministry said on Monday the country will never surrender to foreign pressure after Washington renewed its threat to impose tariffs on all Chinese imports in an escalating trade dispute.

"Fair enough. In fact, both sides will pay in these things, and of course it depends", he said when asked "if it's a tariff on goods coming into the country, the Chinese aren't paying".

After the near collapse of trade talks with China last week, Mr Trump on Friday imposed a hefty duty on import of Chinese products from 10 per cent to 25 per cent worth more than Dollars 200 billion and asking for a similar increase on tariff on the rest of the Chinese import of over USD 300 billion. "We see a significant risk for all Chinese imports to be subject to tariffs over the next month or so", said Michael Hanson, head of global macro strategy at TD Securities.

The move by the United States to impose heightened tariffs on Chinese goods means the likelihood of both sides reaching a deal at the latest round of trade talks has all but evaporated, Chinese analysts said on Friday (May 10).

"Yes, to some extent". "I don't disagree with that". They said that loss could widen to 1 percentage point if both sides extend penalties to all of each other's exports.

Sen. Rand Paul, R-Ky., told ABC's "This Week" on Sunday that he advised the president to finalize a trade deal with China soon, "because the longer we're involved in a tariff battle or a trade war, the better chance there is that we could actually enter into a recession because of it". "For many years, China trade was unfair, non-reciprocal, unbalanced in many cases, unlawful".

Ahead of talks last week, China wanted to delete commitments from a draft agreement that Chinese laws would be changed to enact new policies on issues from intellectual property protection to forced technology transfers. It imposed 10% charges on $60 billion of imports but left other goods unaffected, possibly out of concern for Chinese companies that depend on USA technology and components.

Kudlow told Wallace that Trump and China's President Xi Jinping could meet next month on the sidelines of the G20 summit to discuss their differences on trade, but no new talks are scheduled.

Trump was commenting on the ongoing trade negotiations with Beijing, which continue despite the imposition of tariffs by the administration.

Kudlow also said that Trump and China's President, Xi Jingping, may meet in late June at the G20 worldwide conference in Japan.

'We have to change the trading relationship between two countries for the benefit of the United States and its workforce and its ranchers and farmers and so forth.

As for future negotiations, while there are "no concrete, definite plans yet", Kudlow said China had invited Treasury Secretary Steven Mnuchin and Lighthizer to Beijing - and higher-level discussions could be possible.

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