US President Donald Trump yesterday accused China of violating a bilateral deal to roll back tariffs and announced a doubling of worldwide steel and aluminum tariffs to 50 percent, once again rattling international trade.
Trump said China had violated an agreement with the US to mutually roll back tariffs and trade restrictions for critical minerals and issued a new veiled threat to get tougher with Beijing.
"China, perhaps not surprisingly to some, HAS TOTALLY VIOLATED ITS AGREEMENT WITH US. So much for being Mr. NICE GUY!," Trump said in a post on his Truth Social platform.
Photo: Rebecca Droke, Bloomberg
Later, at a rally in Pennsylvania promoting an impending "partnership" between Japan's Nippon Steel Corp and US Steel Corp, he announced the US would double steel tariffs from 25 percent to 50 percent, effective next week, which he said "will even further secure the steel industry in the United States."
He subsequently announced in a Truth Social post that aluminum tariffs would also double to 50 percent on Wednesday.
While China is the world's largest steel producer and exporter, very little is sent to the US, as a 25 percent tariff imposed in 2018 shut most Chinese steel out of the market. China ranks third among aluminum suppliers.
On overall trade with China, Trump said he made a "fast deal" in mid-May with Chinese officials for both countries to back away from triple-digit tariffs for 90 days. He said he did this to save China from a "devastating" situation, factory closings and civil unrest caused by his tariffs of up to 145 percent on Chinese imports.
Trump did not specify how China had violated the agreement made in Geneva, Switzerland, or what action he would take against Beijing.
Asked later on Friday in the Oval Office about the China deal, Trump said: "I'm sure that I'll speak to President Xi, and hopefully we'll work that out."
The Trump administration is readying other actions targeting China, the White House deputy chief of staff for policy Stephen Miller said later yesterday.
"That opens up all manner of action for the United States to ensure future compliance," Miller told reporters at the White House.
"There are measures that have already been taken, there are measures that are being taken, there are measures that are being considered," he said separately on CNN. "It would be incredibly unwise for China to continue down this path and not seek instead the path of cooperation."
In response, China yesterday urged the US to end "discriminatory restrictions" against Beijing and for the two sides to "jointly uphold the consensus reached at the high-level talks in Geneva," according to a statement from China's embassy in Washington.
"Since the China-US economic and trade talks in Geneva, both sides have maintained communication over their respective concerns in the economic and trade fields on various bilateral and multilateral occasions at multiple levels," Embassy spokesperson Liu Pengyu (劉鵬宇) said
A US official told Reuters that it appeared China was moving slowly on promises to issue export licenses for rare earths minerals. The deal called for China to lift trade countermeasures that restrict its exports of the critical metals needed for US semiconductor, electronics and defense production.
"The Chinese are slow-rolling their compliance, which is completely unacceptable and it has to be addressed," US Trade Representative Jamieson Greer told CNBC, without specifying how that would happen.
Indeed, global auto executives are sounding the alarm on an impending shortage of rare-earths magnets from China — used in everything from windshield-wiper motors to anti-lock braking sensors — that could force the closure of car factories within weeks.
The US-China agreement two weeks ago to dial back triple-digit tariffs for 90 days prompted a massive relief rally in global stocks, and along with other pauses on Trump's import taxes, lowered the effective US tariff rate to the mid-teens from around 25 percent in early April. It was less than 3 percent when Trump took office in January.
The temporary truce between Washington and Beijing, however, had done nothing to address the underlying reasons for Trump's tariffs on Chinese goods, mainly longstanding US complaints about China's state-dominated, export-driven economic model, leaving those issues for future talks.
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