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Trump Denies Trade Talks with China Have Collapsed

Trump Denies Trade Talks with China Have Collapsed

"This just got messier and more expensive to the global economy and until we get a break here, markets are going to be under pressure", said Art Hogan, chief market strategist at National Securities in NY.

And U.S. President Donald Trump said he was optimistic about resolving the trade dispute. The US president has repeatedly accused China of stealing trade secrets, forcing foreign companies to hand over technology as the price of access to the Chinese market, while subsidizing its own tech companies. President Trump said Beijing "broke the deal" by backtracking on earlier commitments to change its policies.

Rather going through a multilateral organization like the World Trade Organization, which would have allowed China to save face against its biggest rival, Trump has chosen potentially humiliating bilateral talks.

Analysts say they expect the tariffs, which could take effect as early as late June barring a trade deal with China, to slow us economic growth by hiking costs to consumers, who are likely to cut back on purchases or shift to products manufactured outside China.

The slightly more optimistic comments came after both sides ramped up their trade war, with China announcing details of new tariffs against USA imports on Monday, following the United States' move last week to target Chinese imports. "You can also buy from a non-Tariffed country instead of China", Trump tweeted on Tuesday.

A further escalation of the trade war could disrupt global supply lines and damage an already slowing world economy, sending financial markets into a tailspin.

China has announced tariff hikes on US$60 billion of U.S. goods in retaliation for United States moves. Getting China to stop subsidizing large sectors of its economy, and to cease its theft of US intellectual property, will be extremely hard.

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Despite the retaliation, Beijing also appeared to give time to find a resolution by setting the June 1 date for those increases to take effect. Another $325 billion in Chinese imports could be subject to tariffs within weeks unless a trade deal is struck with China-an outcome that seems unlikely at the moment. Too expensive to buy in China.

The objective of tariffs is to increase the price of foreign goods for the consumer, and make domestic produce comparatively cheaper, with the aim of encouraging domestic production.

In an interview with CTV News Washington Bureau Chief Joy Malbon, economist Douglas Holtz-Eakin said that the U.S.is right to try to pressure China into "behaving better" when it comes to things like currency manipulation and intellectual property. "Now, their competition costs more", she adds. "They have not been fair traders".

China apparently didn't think Trump would do so. Therefore, China should not retaliate-will only get worse! -China tensions, rebounded. Major U.S. stock indexes were up more than 1%, recovering some of their losses on Monday. "As chairman of the Agriculture Appropriations Committee, I've been making the case to the Administration, both at USDA and the White House, that our producers need another round of MFP as well as other ag assistance", the statement says.

"They will likely pass a lot of that onto the consumer", CBS News Business Analyst Jill Schlesinger said. "They must be a part of United States of America action", he added.

This latest round of tariffs will add another $500 a year in costs for the average American household, says Katheryn Russ, an economics professor at the University of California at Davis.