Image copyright Getty Images Image caption US trade representative Robert Lighthizer spoke of an "erosion" of commitments

US trade representative Robert Lighthizer has accused China of backtracking on commitments in trade talks, but insisted a deal on tariffs is still possible.

He said President Trump's threat to impose new taxes on Chinese exports came after China reneged on promises.

But he said a Chinese delegation was still expected in Washington on Thursday for a further round of talks.

US stocks regained ground after sharp falls earlier.

On Sunday Mr Trump said on Twitter the US would more than double tariffs on $200bn (£152bn) of Chinese goods on Friday and could introduce fresh tariffs.

Speaking to reporters on Monday, Mr Lighthizer said: "Over the course of the last week or so we have seen an erosion in commitments by China. That in our view is unacceptable."

He said China had tried to substantively change the text of an agreement between the countries as it was nearing its final stages.

"We're not breaking off talks at this point. But for now... come Friday there will be tariffs in place," Mr Lighthizer said.

Earlier, world stock markets sank following the president's tweets, with the Shanghai Composite tumbling 5.6%.

However in the US the Dow Jones closed down just 0.3%, having slumped 471 points - almost 1.8% - in early trading.

Image copyright Getty Images Image caption China's top trade official Liu He will is still expected to return to Washington this week

What did Mr Trump say?

On Sunday the US president tweeted that tariffs of 10% on certain goods would rise to 25% on Friday, and $325bn of untaxed goods could face 25% duties "shortly".

"The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!" he tweeted.

He followed that on Monday by tweeting that the US had been "losing" $500bn a year on trade with China. "Sorry, we're not going to be doing that anymore!" his tweet said.

After imposing duties on billions of dollars worth of one another's goods last year, the US and China have been negotiating and in recent weeks, appeared to be close to striking a deal.

Last week US Treasury Secretary Steven Mnuchin described talks held in Beijing as "productive".

But according to reports, in recent days US officials have become frustrated by China's refusal to change its laws as part of the deal - something that had previously been agreed.

Other sticking points have included how to enforce a deal, whether and how fast to roll back tariffs already imposed and issues around intellectual property protection.

On Monday, US Treasury Secretary Steven Mnuchin told reporters that the negotiations were 90% complete but that Chinese negotiators were trying to "go back on language that had been previously negotiated".

"[This was] very clear language, that had the potential of changing the deal dramatically," he said.

Is the deal over?

So far, the US has imposed tariffs on $250bn of Chinese goods, having accused the country of unfair trade practices.

Beijing hit back with duties on $110bn of US goods, blaming the US for starting "the largest trade war in economic history".

Image copyright Getty Images Image caption The US is the biggest export market for Chinese goods

However, some analysts have questioned whether Mr Trump's threats are a negotiating tactic.

William Reinsch, trade policy expert at the Center for Strategic and International Studies, said China would never meet all the US demands.

"At some point the president is going to figure out that they're not going to give him everything he wants," he told news agency AFP.

That will put Mr Trump in "a precarious political position" whether "to accept an agreement that will be criticised as weak, or not to have an agreement and be criticised for failing".

What will the tariff rise affect?

Mr Trump's latest move will raise duties on more than 5,000 products made by Chinese producers, ranging from chemicals to textiles and consumer goods.

The US president originally imposed a 10% tariff on these goods in September that was due to rise in January, but postponed this as negotiations advanced.

Fears about a further escalation caused a slump in world stock markets towards the end of last year.

The IMF has warned a full-blown trade war would weaken the global economy.</s>Why did this happen?

Please make sure your browser supports JavaScript and cookies and that you are not blocking them from loading. For more information you can review our Terms of Service and Cookie Policy.</s>Beijing: By threatening to raise taxes on Chinese imports, President Donald Trump is throwing down a challenge to Beijing: Agree to sweeping changes in China's government-dominated economic model — or suffer the consequences.

The unexpected ultimatum, delivered via tweets on Sunday and Monday, shook up financial markets that had expected the world's two biggest economies to resolve a yearlong standoff over trade, perhaps by the end of the week.

"It's a significant change in the president's tone," said Timothy Keeler, a partner at the law firm Mayer Brown and former chief of staff for the US Trade Representative. "It certainly increases the possibility that you'll have no deal."

For weeks, Trump administration officials had been suggesting that the US and Chinese negotiators were making steady progress. A Chinese delegation is due to resume talks Wednesday in Washington.

Suddenly on Sunday, Trump said he had lost patience:

The president vowed to raise tariffs on $200 billion in Chinese imports from 10 percent to 25 percent on Friday. And he said he planned "shortly" to slap 25 percent tariffs on another $325 billion in Chinese products, covering everything China ships to the United States.

Michael Pillsbury, director of the Hudson Institute's Center on Chinese Strategy and an adviser to the Trump White House, said the president's tweets suggest frustration that Chinese leaders "are trying to take back concessions they already made."

The two countries are engaged in high-stakes commercial combat over China's aggressive push to establish Chinese companies as world leaders in cutting-edge fields such as robotics and electric vehicles.

The Trump administration has imposed 10 percent tariffs on $200 billion in Chinese imports and 25 percent tariffs on another $ 50 billion. The Chinese have retaliated by targeting $110 billion in US imports. Global stock markets sank Monday on Trump's tweetstorm.

But shares in the United States regained some of the lost ground on news that Chinese officials were planning to go ahead with this week's meetings in Washington. Still, the Chinese government did not provide details on exactly when talks would resume and who would be on China's negotiating team.

Trump's threat makes going ahead with talks "very difficult politically" for President Xi Jinping's government, said Jake Parker, vice president of the US-China Business Council. He said the Chinese public might "view this as a capitulation" if Beijing reached an agreement before Trump's Friday deadline.

The conflict is testing how far Beijing is willing to go in changing a state-led economic model it sees as the path to prosperity and global influence — and how much power Washington will have to enforce any agreement.

Beijing is willing to change industrial plans that provoke foreign opposition but wants to preserve the ruling Communist Party's dominant role in directing economic development, said Willy Lam, a politics specialist at the Chinese University of Hong Kong.

Chinese officials have said they are willing to let foreign companies participate in plans that call for government-led creation of global competitors in robotics and other technologies. But they have yet to release details, and it is unclear whether the concessions will satisfy Trump. Xi is "adamant about party-state control over major sectors of the economy," Lam said. "If they give this up, then China in effect ceases to be a socialist country."

Beijing agreed early on to narrow its trade surplus with the United States — a staggering $379 billion last year — by purchasing more American soybeans, natural gas and other exports. At the same time, Xi's government has announced a steady drumbeat of promises to open markets — in businesses that include auto manufacturing and banking.

But none of the moves directly addresses American complaints. The negotiators are also looking for a way to hold Beijing to any commitments it makes.

The Trump administration wants to keep tariffs on Chinese imports to maintain leverage over Beijing. "Trump wants a certain amount of tariffs to remain in place just in case the Chinese don't honour their promises," Lam said.

The Chinese are also skittish about allowing Washington to dictate changes to industrial policy and subsidies, said Raoul Leering, a trade specialist for Dutch bank ING.

They see that as "having another country decide your economic policy."

Trump also seems to be calculating that Xi needs a deal more than he does. The Chinese economy is decelerating.

"Trump believes he can bully the Chinese," Lam said. "Trump realises the Chinese economy is facing a rough patch, and Xi Jinping is under pressure from his own people."

But Trump also has an incentive to reach a deal. The trade war is creating uncertainty for businesses trying to decide where to buy supplies, locate factories and make investments. And it's been weighing on a strong US stock market, which the president likes to tout as evidence that his economic policies are working.

Your guide to the latest election news, analysis, commentary, live updates and schedule for Lok Sabha Elections 2019 on firstpost.com/elections. Follow us on Twitter and Instagram or like our Facebook page for updates from all 543 constituencies for the upcoming general elections.</s>President Trump’s renewed threat to increase tariffs on Chinese imports upended investor expectations about progress toward a trade deal on Monday, making for a volatile day on Wall Street.

The S&P 500 started the day by declining more than 1 percent, with shares in trade-sensitive industrials, semiconductor makers and other technology companies leading the decline. But after recouping the losses throughout the day, the broad market index ended down just 0.45 percent.

Stocks in Asia and Europe fared worse, with the major benchmark in China down more than 5 percent.

The volatile trading on Monday reflected a sudden change in expectations about the potential for a trade deal between the United States and China. With a Chinese delegation expected in Washington to resume negotiations on Wednesday, hopes were running high that the world’s two largest economies would end a grinding trade war that began last summer.

Confidence in that outcome dimmed on Sunday when Mr. Trump threatened to raise tariffs on about $200 billion in Chinese-made goods to 25 percent from the current 10 percent unless he saw more progress toward a deal. He also threatened to extend the tariffs to include another $325 billion in Chinese imports.</s>Chinese stocks dropped sharply after Donald Trump threatened new tariffs on the country.

The US President tweeted late on Sunday night that he would raise tariffs on more than £150billion worth of goods imported from China.

His original 10 per cent tariff, imposed in September, covered items ranging from chemicals to textiles and consumer goods.

But Trump also threatened to impose a 25 per cent tariff on another £250billion of goods from China which are currently not subject to punishing duties.

His threats alarmed investors who had been expecting both sides to agree on a trade deal, after Trump said last week that talks were going ‘pretty well’.

China’s SSE Composite Index, which includes all the stocks traded on the Shanghai Stock Exchange, slid by 5.6 per cent.

The Shenzhen Stock Exchange Composite Index, which is smaller and typically includes more entrepreneurial companies, fell by 7.4 per cent.

Trump tweeted: ‘The trade deal with China continues, but too slowly, as they attempt to renegotiate.

No!’ The price of gold rose as investors sought to protect their money, while the Dow Jones was down just 0.2 per cent as Wall Street analysts said the tariff hikes were unlikely to come into force.</s>NEW YORK (AP) — U.S. stocks fell sharply at the opening of trading Monday, following a sell-off in Europe and Asia, after President Donald Trump threatened to escalate a trade war between the world's two largest economies.

Investors have been expecting the U.S. and China to resolve their damaging trade dispute, with the two sides set to meet this week in Washington. Hopes for an accord have contributed to the big run-up in stock prices in the U.S. and China so far this year.

The latest threat shifted stocks into reverse Monday after the S&P 500 and Nasdaq indexes set records last week.

The Dow Jones Industrial Average fell 307 points, or 1.1%, as of 10 a.m. It was down as much as 471 in the first few minutes of trading.

The S&P 500 index dropped 1.1% and the Nasdaq slid 1.3%.

Trump on Sunday threatened to raise tariffs on imports from China to 25% from 10% after complaining that trade talks were moving too slowly. He also threatened to impose tariffs on another $325 billion in imports from China, covering everything the country ships annually to the United States.

Tariffs currently in place have already raised costs on goods for companies and consumers.

U.S. companies with heavy business interests in China are getting hit the hardest, particularly technology and industrial companies. Banks also fell sharply.

Qualcomm gets 64.7% of its revenue from China, according to data provider FactSet, and its stock fell 2.4%. Broadcom fell 2% and Apple fell 2.6%. Caterpillar fell 2.4%.

Investors fled to safer holdings. Bond prices rose sharply, sending yields lower, and safe-play stocks like utilities, real estate companies and makers of consumer products held up much better than the rest of the market.

Oil prices, which have been steadily rising all year, fell slightly. Benchmark U.S. crude lost 0.2% per barrel.

Shares of Chinese companies that trade in the U.S. also fell. J.D.com slid 5.4% while internet search company Baidu dropped 2.5%.

Investors have been digesting mixed reports about the negotiations for months and have largely discounted concerns about a failure in negotiations. The broader market has been posting gains all year on encouraging economic growth and solid corporate earnings results.

"We see the weekend's developments as a negative catalyst for the market, not only because of where investor expectations have been regarding the deal, but because of the downward earnings revisions that are likely to occur if the tariffs are expanded," said Lori Calvasina, head of U.S. equity strategy at RBC Capital, in a note to clients.

Boeing fell 2.5% after it disclosed that it did not warn airlines about a faulty safety alert until after one of its planes crashed.

The sensors malfunctioned during an October flight in Indonesia and another in March in Ethiopia, causing software on the plane to push the nose down. Pilots were unable to regain control of either plane, and both crashed, killing 346 people.

Boeing said Sunday that it discovered after airlines had been flying its 737 Max plane for several months that a safety alert in the cockpit was not working as intended, yet it didn't disclose that fact to airlines or federal regulators until after one of the planes crashed.</s>WASHINGTON | President Donald Trump turned up the pressure on China on Sunday, threatening to hike tariffs on $200 billion worth of Chinese goods.

Trump’s comments, delivered on Twitter, came as a Chinese delegation was scheduled to resume talks in Washington on Wednesday aimed at resolving a trade war that has shaken financial markets and cast gloom over the world economy.

Trump turned up the heat by saying he would raise import taxes on $200 billion in Chinese products to 25% from 10% on Friday. He’s twice pushed back deadlines — in January and March — to raise the tariffs in a bid to buy more time for a negotiated settlement.

But on Sunday, Trump, who has called himself a “tariff man,” said he’s losing patience. “The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!” Trump tweeted.

The two countries are locked in a high-stakes dispute over China’s push to establish itself as a technological super power. The U.S. charges that China is resorting to predatory tactics — including cybertheft and forcing foreign companies to hand over technology — in a drive to establish Chinese companies as world leaders in advanced industries such as robotics and electric vehicles.

Last July, the Trump administration gradually began slapping import taxes on Chinese goods to pressure Beijing into changing its policies. It now has imposed 10% tariffs on $200 billion in Chinese imports and 25% tariffs on another $50 billion.

The administration has repeatedly suggested that the negotiators are making progress. A month ago, Trump said that the two countries were “rounding the turn” and predicted that “something monumental” would be achieved in the next few weeks.

But last week, Treasury Secretary Steven Mnuchin seemed to temper expectations, suggesting that Washington was willing to “move on” if it can’t get the deal it wants.

A substantive deal would require China to rethink the way it pursues its economic ambitions, abandoning or scaling back subsidies to its companies, easing up on the pressure for foreign companies to share trade secrets, and giving them more access to the Chinese market.

Philip Levy, senior fellow at the Chicago Council on Global Affairs and a White House economist under President George W. Bush, said the talks are too complicated for Trump’s high-pressure tactics to work. “The president treats this like we’re haggling over the price of a used car,” Levy said.

The prospect of higher tariffs and heightened tensions could alarm investors when markets open Monday. “When the president puts his foot down, it makes the market go down,” Chris Rupkey, chief financial economist at MUFG Union Bank, wrote in a research note Sunday. “Tariff man is back just in time to make the stock market dive, dive, dive.”</s>WASHINGTON: US President Donald Trump announced Sunday that the United States would raise tariffs on USD 200 billion of Chinese goods to 25 per cent this week, because trade talks are moving "too slowly".

Trump's action came as a major Chinese delegation is expected to arrive Wednesday in Washington for the latest round of talks to end the trade war between the world's two biggest economies -- a round billed as the last one and possibly leading to a deal to end the conflict.

"For 10 months, China has been paying Tariffs to the USA of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods," Trump tweeted.

"The 10% will go up to 25% on Friday," he said.

The two sides have imposed tariffs on USD 360 billion in two-way trade since last year.

But Trump and Chinese leader Xi Jinping agreed to a truce in December to refrain from further escalation.

As recently as last week, the US had depicted the trade talks as going well.

"The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!" Trump complained Sunday.

Trump says he wants to reduce the huge US trade deficit with China, which in 2018 totalled $378.73 billion if you include trade in services.

Besides a greater opening of the Chinese market to US goods, Trump is pressing for structural changes such as Beijing ending its practice of forcing US companies that operate in China to share their technology.

Trump is also demanding that China halt theft of intellectual property and subsidies to state-owned companies.

To pressure China, Trump has even threatened to slap tariffs on all Chinese products entering the US -- they were worth USD 539.5 billion last year.</s>Washington: US President Donald Trump raised pressure on China over trade negotiations on Sunday by saying US tariffs on certain Chinese products will increase to 25 percent on Friday and that more Chinese goods will face additional tariffs.

"For 10 months, China has been paying tariffs to the USA of 25 percent on 50 billion dollars of high tech, and 10 percent on 200 billion dollars of other goods," Trump wrote on Twitter.

"The 10 percent will go up to 25 percent on Friday. 325 billions dollar of additional goods sent to us by China remain untaxed, but will be shortly, at a rate of 25 percent," he added.

Your guide to the latest election news, analysis, commentary, live updates and schedule for Lok Sabha Elections 2019 on firstpost.com/elections. Follow us on Twitter and Instagram or like our Facebook page for updates from all 543 constituencies for the upcoming general elections.</s>President Trump issued a threat Sunday to hike tariffs on $200 billion worth of Chinese goods to 25 percent at the end of the week, as trade talks with China appeared to be stalling.

He tweeted his frustration over how slowly the negotiations were progressing, writing: “The Trade Deal with China continues, but too slowly, as they attempt to renegotiate. No!”

President Trump, who has called himself a “tariff man”, vowed to hike import taxes on $200 billion in Chinese products from 10 percent to 25 percent.

His comments came as Vice-Premier Liu He is preparing to travel to Washington this week to resume negotiations, with both sides trying to end a trade war that has affected the global economy. Trump already had pushed back deadlines to raise tariffs twice. Treasury Secretary Steve Mnuchin called the previous April talks between the U.S. and China “productive”.

Senate Minority Leader Chuck Schumer, D-N.Y., responded to Trump’s tweet on Sunday by telling him to stay strong. “Hang tough on China, President @realDonaldTrump. Don’t back down,” Schumer wrote.

The two countries have been locked in a high-stakes dispute over China’s push to establish itself as a technological superpower. The U.S. has accused China of resorting to predatory tactics — including cybertheft and forcing foreign companies to hand over technology — in a drive to establish Chinese companies as world leaders in advanced industries such as robotics and electric vehicles.

MEXICO WEIGHS RETALIATORY TARIFF AGAINST U.S. OVER BORDER SLOWDOWNS

Last July, the Trump administration gradually started slapping import taxes on Chinese goods to pressure Beijing into changing its policies. It now has imposed 10 percent tariffs on $200 billion in Chinese imports and 25 percent tariffs on another $50 billion.

The administration repeatedly has suggested that the negotiators were making progress. A month ago, Trump said that the two countries were “rounding the turn” and predicted that “something monumental” would be achieved in the next few weeks.

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But, last week, Mnuchin seemed to temper expectations, suggesting that Washington was willing to “move on” if it couldn’t get the deal it wanted.

A substantive deal would require China to rethink the way it pursues its economic ambitions, abandoning or scaling back subsidies to its companies, easing up on the pressure for foreign companies to share trade secrets, and giving them more access to the Chinese market.

The Associated Press contributed to this report
Chinese stocks are down, falling more than 5 percent as of midday, following U.S. President Donald Trump's threats to raise tariffs against Chinese-made goods on Sunday. The current negotiations for a new deal between the two countries, originally planned for Wednesday, are now in question. U.S. stock futures fell sharply as well.