Trump re­news trade war as China talks end with­out deal

The Tribune (SLO) - - Front Page - BY ALAN RAPPEPORT AND ANA SWAN­SON

Trade talks be­tween China and the United States ended Fri­day with­out a deal as Pres­i­dent Don­ald Trump raised tar­iffs on $200 bil­lion worth of Chi­nese im­ports and sig­naled he was pre­pared for a pro­longed eco­nomic fight.

Trump, who only weeks ago pre­dicted a sign­ing cer­e­mony for an “epic” trade deal with Pres­i­dent Xi Jin­ping of China, re­claimed his stance of threate­conomies en­ing Beijing and in­sist­ing his ap­proach would help the U.S. econ­omy. In a flurry of tweets Fri­day, Trump warned that he would tax nearly all of China’s im­ports if the coun­try con­tin­ued to back­track on a trade deal.

“Tar­iffs will make our Coun­try MUCH STRONGER, not weaker. Just sit back and watch!” Trump said Fri­day morning, adding that the Chi­nese “should not rene­go­ti­ate deals with the U.S. at the last minute.”

The tough­ened stance has thrust the world’s two largest back into a trade war that one week ago had seemed on the cusp of end­ing. Talks be­tween the United States and China suf­fered a set­back over the week­end, when Trump and his ad­vis­ers were sur­prised by what they saw as China’s at­tempt to re­nege on parts of an emerg­ing trade deal. Trump is now mov­ing ahead with plans to im­pose 25% tar­iffs on all re­main­ing Chi­nese im­ports. Those new tar­iffs could go into ef­fect in a mat­ter of weeks.

In a state­ment Fri­day evening, the U.S. trade rep­re­sen­ta­tive said Trump had “or­dered us to be­gin the process of rais­ing tar­iffs on es­sen­tially all re­main­ing im­ports from China, which are val­ued at ap­prox­i­mately $300 bil­lion.”

On Fri­day af­ter­noon, Trump sug­gested that the ball was in Beijing’s court, say­ing, “The United States has im­posed Tar­iffs on China, which may or may not be re­moved depend­ing on what hap­pens with re­spect to fu­ture ne­go­ti­a­tions!”

Both sides had agreed to meet again in Wash­ing­ton on Thurs­day and Fri­day, but the talks were brief and fo­cused mostly on the roots of the re­cent im­passe. By early af­ter­noon Fri­day, the meet­ing had con­cluded, and no fur­ther faceto-face ne­go­ti­a­tions were sched­uled. Trump called the

dis­cus­sions “can­did and con­struc­tive,” and China’s vice premier, Liu He, said the talks went “fairly well.” An ad­min­is­tra­tion of­fi­cial said it was pos­si­ble that the ne­go­tia­tors could re­con­vene in June in Beijing.

Stock mar­kets fell in early morning trad­ing but re­gained ground af­ter Trump’s com­ments.

It re­mains un­clear whether the two coun­tries can sal­vage a trade agree­ment that is com­pli­cated by po­lit­i­cal dy­nam­ics on both sides of the Pa­cific. Trump, who has promised to be tough on China, is ea­ger to avoid be­ing seen as sign­ing a weak deal that does not take ad­van­tage of the lever­age the United States has cre­ated with its tar­iffs. But Xi is also fac­ing pres­sure from hard-lin­ers in China, who do not want to ac­qui­esce to the United States, par­tic­u­larly Wash­ing­ton’s de­mands that China make changes to its laws.

On Fri­day, the trade dis­pute ap­peared to be lurch­ing to­ward an all-out eco­nomic war. China has threat­ened to re­tal­i­ate with its own “coun­ter­mea­sures,” which in­clude end­ing pur­chases of Amer­i­can farm goods and es­tab­lish­ing other non­tar­iff bar­ri­ers for com­pa­nies try­ing to gain ac­cess to the Chi­nese market.

Trump con­tin­ued to in­sist that his tough ap­proach would ben­e­fit the U.S. econ­omy, par­tic­u­larly farm­ers, who have faced re­tal­i­a­tion from China as a re­sult of the trade war. But the pres­i­dent sug­gested he would once again try to in­su­late farm­ers, many of whom sup­port his pres­i­dency, from ad­di­tional pain through an­other round of fi­nan­cial sup­port. The ad­min­is­tra­tion pre­vi­ously cre­ated a $12 bil­lion aid pro­gram to help com­pen­sate farm­ers for tradere­lated losses.

Chi­nese of­fi­cials said the de­ci­sion to come to the United States af­ter Trump’s tar­iff threat was in­tended to show they are se­ri­ous about con­tin­u­ing dis­cus­sions. But it is un­clear whether China is will­ing to make the changes that the Trump ad­min­is­tra­tion is de­mand­ing, in­clud­ing cod­i­fy­ing much of the emerg­ing agree­ment into law. Trump’s ad­vis­ers want to en­sure China does not vi­o­late an agree­ment that is aimed at giv­ing Amer­i­can com­pa­nies greater ac­cess to China’s market and en­sur­ing pro­tec­tions for their tech­nol­ogy and trade se­crets.

“I come here fac­ing pres­sure,” Liu said Thurs­day in an in­ter­view with China Cen­tral Tele­vi­sion in Wash­ing­ton. “That ex­presses China’s great­est sin­cer­ity. And we want to re­solve some of the dif­fer­ences we face hon­estly, con­fi­dently and ra­tio­nally. I think there is hope.”

China has yet to spec­ify the coun­ter­mea­sures it plans to take, but the ad­min­is­tra­tion sig­naled this week that it ex­pected farm­ers to once again bear the brunt of any re­tal­i­a­tion.

Trump sug­gested Fri­day that the United States would use the tar­iff money it col­lects to buy Amer­i­can farm prod­ucts, which it would then ship to “poor & starv­ing coun­tries in the form of hu­man­i­tar­ian as­sis­tance. In the mean­time we will con­tinue to ne­go­ti­ate with China in the hopes that they do not again try to redo deal!”

Other ad­min­is­tra­tion of­fi­cials sug­gested some type of aid pro­gram was in the works but did not ex­pand on Trump’s idea.

“Make no mis­take about it, we have al­ready had pre­lim­i­nary dis­cus­sions in the White House for ad­di­tional sup­port for farm­ers if this im­passe with China con­tin­ues,” Vice Pres­i­dent Mike Pence said in re­marks Thurs­day in Min­nesota.

Sonny Per­due, the agri­cul­ture sec­re­tary, said Fri­day that he had spo­ken to Trump, who di­rected him to de­velop a new plan to sup­port farm­ers. Per­due said on Twit­ter that Trump “loves his farm­ers and will not let them down!”

Econ­o­mists have crit­i­cized aid to farm­ers as less ef­fec­tive than open­ing up over­seas mar­kets. They have also al­most uni­formly re­jected the pres­i­dent’s ar­gu­ments that tar­iffs are good for the United States, say­ing that these taxes re­duce eco­nomic ac­tiv­ity by rais­ing prices for con­sumers.

The United States and China had been near­ing a trade deal that would lift tar­iffs, open the Chi­nese market to Amer­i­can com­pa­nies and strengthen China’s in­tel­lec­tual prop­erty pro­tec­tions. But dis­cus­sions fell apart last week­end, when China called for sub­stan­tial changes to the ne­go­ti­at­ing text that both coun­tries had been us­ing as a blue­print for a sweep­ing trade pact.

STEVE HEL­BER AP

A con­tainer ship is un­loaded Fri­day at the Vir­ginia In­ter­na­tional Gate­way ter­mi­nal in Nor­folk. Pres­i­dent Don­ald Trump’s lat­est tar­iff in­crease on Chi­nese goods took ef­fect Fri­day, and Beijing said it would re­tal­i­ate.

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