Fri, Jun 28, 2019 - Page 10 News List

Trump floats ‘plan B’ on China trade

MORE TARIFFS?Trump called Vietnam an ‘abuser,’ as many companies have moved production there, and vowed to ask India’s Modi to remove ‘unacceptable’ tariffs

Bloomberg

US President Donald Trump said that substantial additional US tariffs would be placed on goods from China if there is no progress on a trade deal after his planned meeting with Chinese President Xi Jinping (習近平) on the sidelines of the G20 summit in Japan.

“My plan B with China is to take in billions and billions of dollars a month and we’ll do less and less business with them,” Trump said on Wednesday during an interview with Fox Business Network’s Maria Bartiromo.

The White House has announced that Trump’s meeting with Xi would take place at 11:30am tomorrow in Osaka.

Trump has previously said that he might decide to raise tariffs on the remaining US$300 billion of Chinese imports if he does not like what he hears from Xi at the summit in Osaka.

Asian stocks advanced yesterday on optimism that Trump and Xi would reach a truce at their highly anticipated meeting.

Trump’s remarks added an element of doubt to US Secretary of the Treasury Steven Mnuchin’s comment earlier on Wednesday on CNBC that he is “hopeful” about US-China trade negotiations.

An alternate course as the trade talks resume might be that the US suspends the next round of tariffs on the additional US$300 billion of Chinese imports, Bloomberg reported on Tuesday.

If the tariffs on the broader set of goods does go into effect, it could be at a 10 percent rate rather than 25 percent, Trump said in the interview.

“My plan B’s maybe my plan A. My plan B is that if we don’t make a deal, I will tariff, and maybe not at 25 percent, but maybe at 10 percent,” Trump said.

Trump criticized a range of trading partners, including Germany and Vietnam, which he called an “abuser” when responding to a question about companies relocating production from China to that nation following US-imposed tariffs.

Trump later took a shot at India, saying on Twitter he would ask Indian Prime Minister Narendra Modi to withdraw an “unacceptable” increase in tariffs on US goods.

It was his first direct response to India’s move earlier this month to raise tariffs on a slew of products from walnuts to pulses, which was delayed since last year as Modi sought talks.

In the interview, Trump said that he likes China and Xi, but added: “They have taken advantage of us for so long.”

“They devalue their currency like a ping-pong ball,” he said.

No detailed trade deal is expected from the leaders’ summit, a senior US administration official said on Tuesday.

The goal of the meeting is to create a path forward for a trade agreement after negotiations broke down last month, but the South China Morning Post yesterday reported that the US and China have agreed to a tentative truce in their trade dispute ahead of the G20 meeting.

Details of the agreement, which would halt the next round of US tariffs, are being laid out in press releases and would be out as coordinated press releases and not a joint statement, the newspaper said.

Xi’s meeting with Trump is conditional upon Washington agreeing to such a tentative agreement, it reported, citing one source with knowledge of the plans.

Additional reporting by Reuters

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