WASHINGTON, May 15 — US President Donald Trump yesterday called the trade war with China “a little squabble” and insisted talks between the world's two largest economies had not collapsed, as investors remained on guard for a further escalation of tit-for-tat tariffs.
Trump, who has railed against what he describes as China's unfair trade practices and threatened to impose punitive levies on all its imports, softened his tone in a series of remarks expressing optimism about reaching a trade deal with Beijing.
“We're having a little squabble with China because we've been treated very unfairly for many, many decades,” Trump told reporters, referring to US complaints about Chinese intellectual property and subsidy practices.
Trump also denied talks with China had broken down after Washington punctuated two days of negotiations last week with another round of tariffs on Chinese imports, with Beijing following suit on Monday with higher tariffs on US goods.
“We have a dialogue going. It will always continue,” said the US president, who has announced plans to meet Chinese President Xi Jinping at a G20 summit in Japan late next month. Trump described the dialogue with China as “very good” and touted his “extraordinary” relationship with Xi.
Earlier, Trump tweeted that the United States would make a deal with China when the “time is right” and said that would happen “much faster” than thought.
Global stock markets, which have seen a sharp selloff in the past week on the back of rising US-China tensions, rebounded. Major US stock indexes were up more than 1 per cent, recovering some of their losses on Monday. The US dollar rose against a basket of currencies.
Earlier yesterday, Chinese Foreign Ministry spokesman Geng Shuang told a daily news briefing that it was his understanding that China and the United States had agreed to continue “pursuing relevant discussions.”
“As for how they are pursued, I think that hinges upon further consultations between the two sides,” Geng said.
US Treasury Secretary Steven Mnuchin will plan for a trade meeting in China at some point, a US Treasury spokesman said.
US agricultural products have been targeted by China's retaliatory tariffs, and American farmers, a key political constituency for Trump, are increasingly frustrated with the failure of the two sides to find a solution to the dispute.
Soybeans, which was the most valuable US export crop, bounced off a decade low yesterday as the market's focus shifted to weather-related planting delays that could reduce the crop size. Some analysts said the worst of the trade news was priced into the market.
In a tweet earlier yesterday, Trump appealed to China to buy US farm products.
On Monday, he said his administration would provide about US$15 billion (RM62.5 billion) in aid to farmers whose products were targeted by Chinese tariffs. He did not provide details on the plan, which follows US$12 billion in similar farm aid last year.
There are concerns that the pain from tariffs could spread to the broader US economy, with businesses raising prices on a range of consumer goods. Consumer spending accounts for two-thirds of US economic activity.
Senate Majority Leader Mitch McConnell said yesterday that “nobody wins a trade war” but he hoped Trump's tactics in negotiations China would put the United States in a better position to move talks forward with Beijing.
Tariffs in hand
Trump, however, is still dangling the prospect of higher tariffs on Chinese goods.
As negotiations toward resolving the US-China trade war stalled last week, the United States raised the pressure by increasing tariffs to 25 per cent from 10 per cent on a previous, US$200 billion list of Chinese imports.
China retaliated on Monday with higher tariffs on a revised list of US$60 billion worth of US. products
Trump could launch 25 per cent tariffs on another US$300 billion worth of Chinese goods when he meets Xi next month. The list includes a wide range of consumer goods, from cellphones and computers to clothing and footwear, but it excludes pharmaceuticals, some specialty compounds and rare-earth minerals.
At the same time, China is vowing not to succumb to such pressure. China's Foreign Ministry said yesterday it hoped the United States did not “underestimate China's determination and will to safeguard its interests.”
A further escalation of the trade war could disrupt global supply lines and damage an already slowing world economy, sending financial markets into a tailspin. The US economy, while growing at a healthy clip, could come under pressure.
Sources have said the trade talks hit an impasse after China tried to delete commitments from a draft agreement that said its laws would be changed to enact new policies on issues from intellectual property protection to forced technology transfers.
Geng put the blame on Washington for going back on its word in some previous rounds of talks, including last May, when the two sides reached an agreement in Washington but then the United States backed out a few days later. — Reuters
