White House intensifies confusion and fear on US-China deal

Roman Schwartz
December 7, 2018

President Donald Trump threatened Tuesday to slap more tariffs on China if efforts to strike a trade deal with Beijing crumble.

China has said that Beijing and Washington will push forward with trade negotiations in the next 90 days and it is confident that an agreement can be reached but doubts remain over whether the two sides can resolve their deep differences.

On Wednesday, the Global Times tabloid, which is run by the Chinese Communist Party's main newspaper, said the Trump administration's statements about the deal - including the agreement that China would buy $1.2 trillion in additional USA goods - were created to highlight or even exaggerate facets of the deal that benefited the United States.

The president's optimistic comments came one day after stock prices around the world plunged in response to a series of tweets he posted on Tuesday, warning a fragile accord between the two countries could crumble. The statement did not mention whether Trump discussed tariffs with the automakers.

Chinese officials have said they are "confident in implementing" trade commitments made to the USA "as soon as possible", without giving details.

White House economic adviser Larry Kudlow said earlier this week the USA won Chinese commitments to buy more than $1 trillion in American products. China has imposed duties on about $110 billion in US products. "China does not want Tariffs!"

Mr Trump said this week on Twitter that Beijing had agreed to "reduce and remove" tariffs the 40% tariffs it places on USA cars.

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The 90-day truce in the escalating trade war between the US and China came during a dinner meeting between the two presidents following the G-20 summit of the world's industrialized and emerging economies in Buenos Aires. "Not to sound naive or anything, but I believe President Xi meant every word of what he said at our long and hopefully historic meeting".

Trump agreed that on January 1, 2019, he will leave the tariffs on United States dollars 200 billion worth of product at the 10 per cent rate, and not raise it to 25 per cent at this time.

The disarray surrounding the China deal coincides with a global economy that faces other challenges: Britain is struggling to negotiate its exit from the European Union. Ben Sasse, a Nebraska Republican and opponent of Trump's tariff policy, criticized the president's tweets on that basis.

Trump and White House aides have promoted the apparent U.S. Should China remove the tariffs now, USA soybean would likely still be uncompetitive in the global market as harvest season approaches for the crop in South America.

After the leaders of the world's two biggest economies agreed to a temporary pause in their trade war, .

"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. The downside for China is that it also needs US sourced LNG as its insatiable gas demand expands amid Beijing's mandate that gas make up at least 10 percent of its power generation energy mix by 2020, with further earmarks set for 2030. "The meeting with the president was very good and very open".

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