Price cuts in China follow tariff reduction announcement

Ivanka Trump and her son Theodore Kushner

Ivanka Trump and her son Theodore Kushner

Trump's administration announced plans Tuesday to slap $50 billion worth of tariffs on Chinese technology while taking steps to impose new investment restrictions and export controls, aimed at pushing China to remove trade barriers that make it hard for US companies to do business in China.

The negotiations with ZTE come as U.S. Commerce Secretary Wilbur Ross heads to Beijing this weekend for trade talks.

If the United States implements trade sanctions including tariffs then all outcomes of the China-US trade talks will be void, state news agency Xinhua said on Sunday following high-level trade discussions in Beijing.

Hitting back at the Trump administration's threat to impose a 25 percent tariff on $50 billion goods imported from China, Foreign Ministry spokesperson Hua Chunying said, "In worldwide relations, every flip-flop and U-turn by a country will undermine and hurt its own credibility".

The White House announcement said it also would impose curbs on Chinese investment and purchases of high-tech exports.

The briefing particularly pointed out imbalances in auto trade, arguing that the US charged a 2.5 percent tariff on Chinese cars while China's tariff on USA cars was 25 percent.

If the two sides fail to reach an agreement and the United States moves forward with tariffs, Chinese officials have said they plan to retaliate with tariffs of their own on U.S. exports such as soybeans.

The Pentagon has also banned ZTE products from being sold on US military bases along with phones made by Huawei, another Chinese firm.

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"Since March 1, when speculation about Chinese retaliation against USA pork began, hog futures have dropped $18 per animal, translating to a $2.2 billion loss on an annualized basis", Dermot Hayes, Iowa State University economist, said in a press release from NPPC on Tuesday.

The president has bemoaned the massive USA trade deficit with China - $337 billion previous year - as evidence that Beijing has been complicit in abusive trading practices and outsmarted his predecessors.

But on Tuesday evening it said that sanctions announced in March - largely focused on China's theft of United States intellectual property - were still in the works and details would be announced in the coming month.

The tariff threat could still disrupt Ross's China talks.

Recent months have also seen Trump pull out of the Iran nuclear deal, open a USA embassy in Jerusalem, leave the Paris climate pact and lambast North Atlantic Treaty Organisation allies for not paying their way.

Also on Tuesday, a White House official said the United States government plans to shorten the length of visas issued to some Chinese citizens as part of a strategy to prevent intellectual property theft by U.S. rivals. New research from JPMorgan and The Conference Board suggest it's not just how much USA companies import from China, but how much they make in China.

Mnuchin nonetheless said there was still G7 agreement on the need for policy change in China.

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