President Donald Trump with China’s President Xi Jinping during their bilateral meeting. (Source: AP Via PTI)

Trump Warns China Impasse to Worsen If Xi Retaliates on Tariffs

(Bloomberg) -- President Donald Trump threatened that the trade standoff with China will “get worse” if there is retaliation for U.S. tariffs that go into effect on Chinese goods Monday.

“I say openly to President Xi & all of my many friends in China that China will be hurt very badly if you don’t make a deal because companies will be forced to leave China for other countries,” Trump wrote in one of several Twitter messages.

Trump’s comments come after high-level talks between Chinese and American officials broke up May 10 without a deal and ahead of an expected announcement Monday from U.S. officials detailing their plans to impose a 25% additional tariff on all remaining imports from China -- some $300 billion in trade.

As Beijing promised retaliatory measures, Chinese state media blamed the U.S. for a lack of progress in trade talks while emphasizing the country’s economic resilience.

People’s Daily, the flagship newspaper of China’s Communist Party, said in a front-page commentary that the U.S. should take full responsibility for the setbacks because it went back on its word and imposed more levies on Chinese products. “That cast a shadow on the trade talks and directly led to the fruitless outcome” of trade discussions, the paper said.

The ongoing trade fight between the world’s two biggest economies is roiling markets and weighing on projections for global growth.

U.S. equity futures slumped, pointing to a big drop at the open in New York, and stocks declined across Europe and Asia Monday as investors awaited the next phase of the escalating trade war between America and China. The yuan tumbled and Treasuries rallied

Trump’s latest China trade comments brought to at least 30 the number of tweets or retweets he’s issued about China or tariffs since May 10, the day they the last round of trade talks concluded.

Perhaps with an eye toward the 2020 election, the president and his aides are insisting that the renewed conflict won’t adversely affect the U.S. economy, putting them at odds with many economists.

The White House’s top economic adviser, Larry Kudlow, predicted that the impact on U.S. jobs and growth from higher tariffs assessed on Chinese goods would be “de minimis,” while conceding that “both sides will suffer” from the trade war.

Trump has repeatedly said that China will pay the tariffs that increased May 10 to 25 percent from 10 percent on $200 billion in Chinese goods. Kudlow undercut that in an interview on “Fox News Sunday.”

No date has been set for fresh talks. but it’s likely Trump would meet with Chinese President Xi Jinping during the G20 meeting in Osaka, Japan, in late June, Kudlow said.

©2019 Bloomberg L.P.