Trump: China will do right on trade
President calls Xi a good friend
WASHINGTON — Amid global fears of an escalating trade dispute between the U.S. and China, President Donald Trump suggested that Beijing will ease trade barriers “because it is the right thing to do” and that the economic superpowers can settle the conflict that has rattled financial markets, consumers and businesses.
But fostering more uncertainty, the president’s top economic advisers offered mixed messages Sunday as to the best approach with China, which has threatened to retaliate if Washington follows through with its proposed tariffs, even as Trump emphasized his bond with Chinese President Xi Jinping.
“President Xi and I will always be friends, no matter what happens with our dispute on trade,” Trump wrote. “China will take down its Trade Barriers because it is the right thing to do. Taxes will become Reciprocal & a deal will be made on Intellectual Property. Great future for both countries!”
But Trump did not explain why, amid a week of economic threats between the two countries that shook global markets, he felt confident a deal could be made.
The president made fixing the trade imbalance with China a centerpiece of his presidential campaign, where he frequently described how Beijing would “rape” the U.S. economically. But even as Trump cozied up to Xi and pressed China for help with derailing North Korea’s nuclear ambitions, he has ratcheted up the economic pressure and threatened tariffs, a move opposed by many fellow Republicans.
The Trump administration has said it is taking action as a crackdown on China’s theft of U.S. intellectual property. The U.S. bought more than $500 billion in goods from China last year and now is planning or considering penalties on some $150 billion of those imports. The U.S. sold about $130 billion in goods to China in 2017 and faces a potentially devastating hit to its market there if China responds in kind.
China has pledged to “counterattack with great strength” if Trump decides to follow through on his latest threat to impose tariffs on an additional $100 billion in Chinese goods — after an earlier announcement that targeted $50 billion. Beijing also declared that the current rhetoric made negotiations impossible, even as the White House suggested that the tariff talk was a way to spur China to the bargaining table.
Top members of Trump’s
economic team, speaking on Sunday morning talk shows, defended the U.S. threats to impose tariffs on Chinese imports and framed the moves as part of a longer-term strategy for growth — while suggesting a trade war can be averted.
The new White House economic adviser, Larry Kudlow, said Sunday that a “coalition of the willing” — including Canada, much of Europe and Australia — was being formed to pressure China and that the U.S. would demand that the World Trade Organization, an arbiter of trade disputes, be stricter on Beijing. And he said that although the U.S. hoped to avoid taking action, Trump “was not bluffing.”
“This is a problem caused by China, not a problem caused by President Trump,” Kudlow said on Fox News Sunday.
But he also downplayed the tariff threat as “part of the process,” suggested on CNN that the impact would be “benign” and said he was hopeful that China would enter negotiations. Kudlow, who started his job a week ago after his predecessor, Gary Cohn, quit over the tariff plan, brushed aside the possibility of economic repercussions.
“I think it’s going to generate very positive results which will grow” the economies of the U.S., China and the world, Kudlow said on State of the Union.
“I don’t think there’s any
trade war in sight,” he told Fox.
Treasury Secretary Steven Mnuchin said on CBS’ Face the Nation that he didn’t expect the tariffs to have a “meaningful impact on the economy” even as he left the door open for disruption. He allowed that there “could be” a trade war but said he didn’t anticipate one.
The U.S. objective “is to continue to have discussions with China,” he said. He declined to comment on the progress of any back-channel talks with Beijing.
“You’ll know when we reach a deal there’s progress, and that’s our objective,” Mnuchin said.
Still, White House adviser Peter Navarro, known as a hard-liner on trade, said the threat of tariffs is not merely a bargaining chip. “We’re moving forward in a measured way,” he said on NBC’s Meet the Press.
Navarro has said that high-level talks will take place before any tariffs will take effect, led on the U.S. side by Mnuchin and Trade Representative Robert Lighthizer.
He also declared that China’s behavior was “a wake-up call to Americans.”
“They are in competition with us over economic prosperity and national defense,” Navarro said. “Every day of the week China comes into our homes, our business and our government agencies. … This country is losing its strength even as China has grown its economy.”
Trump’s latest proposal intensified what was already shaping up to be the biggest trade battle in more than a half century.
Trump told advisers last week that he was unhappy with China’s decision to tax $50 billion in American products, including soybeans and small aircraft, in response to a U.S. move to impose tariffs on $50 billion in Chinese goods. Rather than waiting weeks for the U.S. tariffs to be implemented, Trump backed a plan by Lighthizer to seek the enhanced tariffs.
The rising economic tensions pose a test to what has become Trump’s frequent dual-track foreign policy strategy: to establish close personal ties with another head of state even as his administration takes a harder line. The president has long talked up his friendship with Xi, whom he has praised for consolidating power in China despite its limits on democratic reforms.
Further escalation could be in the offing. The U.S.
Treasury Department is working on plans to restrict Chinese technology investments in the U.S. And there is talk that the U.S. could also put limits on visas for Chinese who want to visit or study in the U.S.
For Trump, the dispute runs the risk of blunting the economic benefits of his tax overhaul, which is at the center of congressional Republicans’ case for voters to keep them in power in the 2018 elections. China’s retaliation so far has targeted Midwest farmers, many of whom were bedrock Trump supporters.
In Beijing, the U.N. secretary-general and the Singaporean foreign minister voiced concerns about global trade tensions and rising protectionism during backto-back meetings on Sunday.
After remarks from his Chinese counterpart, Singaporean Foreign Minister Vivian Balakrishnan vowed to “double down” on free trade and economic liberalization in tandem with China.
“This is a time in the world where the temptation to embark on unilateralism and protectionism is unfortunately rising,” Balakrishnan said.
In a separate meeting, Secretary-General Antonio Guterres called China “absolutely crucial” in the international system.
“You mentioned reform and opening up — it’s so important in a moment when some others have a policy of closing up,” Guterres told Chinese Foreign Minister Wang Yi.
“The solutions for these problems are not to put globalization to question, but to improve globalization. Not isolation or protectionism, but more international cooperation,” Guterres said.
In the meetings, Wang attacked what he called “protectionism and unilateralism,” though he didn’t single out the United States by name.
“China will safeguard the principles of free trade and oppose protectionism,” Wang said. “We should push forward with economic globalization.”
Wang was welcoming both officials ahead of their planned appearances at the annual Boao Forum for Asia, a Chinese-sponsored gathering for political and economic elites on tropical Hainan Island.