Trump says US is ‘where we want to be’ on China trade talks

US President Donald Trump speaks during a "Make America Great Again" rally at Aaron Bessant Amphitheater in Panama City Beach, Florida on May 8, 2019.Image copyright Getty Images

US President Donald Trump says the US is “right where we want to be with China” as both sides remain locked in a bruising trade battle.

The US more than doubled tariffs on $200bn (£153.7bn) of Chinese goods on Friday, in a sharp escalation of their trade war.

Earlier, Mr Trump’s top economic adviser, Larry Kudlow, said “both sides will suffer” from the trade dispute.

But Mr Trump later downplayed the impact of the tariff hike on the US.

“We are right where we want to be with China. Remember, they broke the deal with us & tried to renegotiate,” Mr Trump wrote in a post on Twitter.

“We will be taking in tens of billions of dollars in tariffs from China. Buyers of product can make it themselves in the USA (ideal), or buy it from non-tariffed countries.”

However, in an interview with Fox News on Sunday, Mr Kudlow admitted that it was American businesses that paid the tariffs on any goods brought in from China, and that US consumers would also foot the bill if firms passed on the cost increase.

Mr Kudlow said he thought the tariffs would also have an impact on China’s economy, as the higher cost would reduce US demand for Chinese goods.

On Friday, the US increased a 10% tariff on $200bn worth of Chinese goods – including fish, handbags, clothing and footwear – to 25%.

The Office of the United States Trade Representative has also said it has been ordered to “begin the process of raising tariffs on essentially all remaining imports from China, which are valued at approximately $300 billion”.

China has said it will retaliate but has not announced any details including when it would take action.

The higher tariffs will be paid by American companies importing goods from China.

Economists have said a 25% tariff will be much harder for businesses to absorb than 10%, which means they are more likely to pass on some of the cost to consumers.

Asked in an interview with Fox News Sunday whether it was correct to say that it was US businesses and US consumers who pay for the tariff, Mr Kudlow said: “Yes, to some extent. I don’t disagree with that.”

“Both sides will suffer on this.”

Mr Kudlow also said there was a “strong possibility” that Mr Trump would meet with China’s President Xi Jinping at a G20 summit in Japan in late June.

Chinese retaliation

China said on Friday it “deeply regrets” the US decision to hike tariffs and that it will have to retaliate with the “necessary countermeasures.”

In the past, the Chinese have introduced retaliatory tariffs almost immediately after US tariffs have gone into force.

China has responded saying it will not swallow any “bitter fruit”. The commentary is due for publication on Monday in the ruling Communist Party’s People’s Daily.

The US argues that China’s trade surplus with the US is the result of unfair practices, including state support for domestic companies. It also accuses China of stealing intellectual property from US firms.

The latest tariff increase marks a sharp escalation of the US-China trade war which has already been weighing on the global economy.

The International Monetary Fund (IMF) said the escalation of US-China trade tension was one factor to have contributed to a “significantly weakened global expansion” late last year as it cut its 2019 global growth forecast.

About The Author

Leave a Reply

Your email address will not be published. Required fields are marked *