President Donald Trump threatened on Tuesday to place ‘major tariffs’ on Chinese goods imported into the US if his administration is unable to reach an effective trade deal with Beijing.
‘We are either going to have a REAL DEAL with China, or no deal at all – at which point we will be charging major Tariffs against Chinese product being shipped into the United States,’ the president tweeted.
‘Ultimately, I believe, we will be making a deal – either now or into the future…China does not want Tariffs!’ Trump added.
The Trump administration raised doubts about the substance of a US-China trade cease-fire, contributing to a broad stock market plunge and intensifying fears of a global economic slowdown.
President Donald Trump threatened on Tuesday to place ‘major tariffs’ on Chinese goods imported into the US if his administration is unable to reach an effective trade deal with Beijing
Investors had initially welcomed the truce that the administration said was reached over the weekend in Argentina between Presidents Trump and Xi Jinping (both pictured) – and sent stocks up Monday
Investors had initially welcomed the truce that the administration said was reached over the weekend in Argentina between Presidents Trump and Xi Jinping – and sent stocks up Monday.
But on Tuesday, after a series of confusing and conflicting words from Trump and some senior officials, stocks tumbled, with the Dow Jones shedding about 800 points, or 3.1 per cent.
White House aides have struggled to explain the details of what the two countries actually agreed on. And China has not confirmed that it made most of the concessions that the Trump administration has claimed.
‘The sense is that there’s less and less agreement between the two sides about what actually took place,’ said Willie Delwiche, an investment strategist at Baird.
‘There was a rally in the expectation that something had happened. The problem is that something turned out to be nothing.’
Trump and White House aides have promoted the apparent US-China agreement in Buenos Aires as a historic breakthrough that would ease trade tensions and potentially reduce tariffs.
They announced that China had agreed to buy many more American products and to negotiate over the administration’s assertions that Beijing steals American technology.
But by Tuesday morning, Trump was renewing his tariff threats in a series of tweets.
‘President Xi and I want this deal to happen, and it probably will,’ Trump tweeted.
‘But if not remember, I am a Tariff Man. When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so.’
Trump added that a 90-day timetable for negotiators to reach a deeper agreement had begun and that his aides would see ‘whether or not a REAL deal with China is actually possible’.
The president’s words had the effect of making the weekend agreement, already a vague and uncertain one, seem even less likely to produce a long-lasting trade accord.
But by Tuesday morning, Trump was renewing his tariff threats in a series of tweets. ‘President Xi and I want this deal to happen, and it probably will,’ Trump tweeted
In addition, Treasury Secretary Steven Mnuchin (pictured) said that China agreed to buy $1.2trillion of US products. But Mnuchin said, ‘If that’s real’ – thereby raising some doubt – it would close the US trade deficit with China
Among the conflicting assertions that White House officials made was over whether China had actually agreed to drop its 40 per cent tariffs on US autos.
In addition, Treasury Secretary Steven Mnuchin said Tuesday on the Fox Business Network that China agreed to buy $1.2trillion of US products.
But Mnuchin said, ‘If that’s real’ – thereby raising some doubt – it would close the US trade deficit with China, and ‘we have to have a negotiated agreement and have this on paper’.
Many economists have expressed skepticism that very much could be achieved to bridge the vast disagreements between the two countries in just 90 days.
‘The actual amount of concrete progress made at this meeting appears to have been quite limited,’ Alec Phillips and other economists at Goldman Sachs wrote in a research note.
During the talks in Buenos Aires, Trump agreed to delay a scheduled escalation in US tariffs on many Chinese goods, from 10 per cent to 25 per cent, that had been set to take effect January 1.
Instead, the two sides are to negotiate over US complaints about China’s trade practices, notably that it has used predatory tactics to try to achieve supremacy in technology.
These practices, according to the administration and outside analysts, include stealing intellectual property and forcing companies to turn over technology to gain access to China’s market.
In return for the postponement in the higher US tariffs, the White House said China had agreed to step up its purchases of US farm, energy and industrial goods.
Chief economic adviser Larry Kudlow (pictured) acknowledged challenges in remarks Tuesday morning. ‘China’s discussed these things with the US many times down through the years and the results have not been very good,’ he said
Most economists noted that the two countries remain far apart on the sharpest areas of disagreement, which include Beijing’s subsidies for strategic Chinese industries, in addition to forced technology transfers and intellectual property theft.
Chief economic adviser Larry Kudlow acknowledged those challenges in remarks Tuesday morning.
‘China’s discussed these things with the US many times down through the years and the results have not been very good,’ he said. ‘So this time around, as I said, I’m hopeful, we’re covering more ground than ever … So we’ll see.’
Complicating the challenge, Trump’s complaints strike at the heart of the Communist Party’s state-led economic model and its plans to elevate China to political and cultural leadership by creating global champions in robotics and other fields.
‘It’s impossible for China to cancel its industry policies or major industry and technology development plans,’ said economist Cui Fan of the University of International Business and Economics in Beijing.