Trump says China trade deal is 'too hard to get done'

Donna Miller
May 25, 2018

-China trade negotiation is "going to be a lengthy process".

Trump's statement comes amid the negotiations between the world's two largest economies after potential tariffs on both sides raised fears of a trade war, even as some tensions have eased over signs of some possible progress.

China is aggressively pursuing its territorial claims in the South China Sea - including by militarizing disputed areas and pushing its borders far out into global waters - despite an worldwide arbitral ruling invalidating them.

Any U.S. plan to unilaterally raise tariffs on auto imports "obviously would be against" rules of the World Trade Organization, said European Commission Vice-President Jyrki Katainen.

In fact, his unpredictable policy moves and temperament are offering openings to China that could help it fulfill its mission of cementing its rise to superpower status more quickly than expected. In an interview with Bloomberg, Dan DiMicco, the former chief executive of the steel company, Nucor, said it did not "make sense" to have the treasury secretary negotiating trade policy, as this was the United States trade representative's job. But it failed to commit to shrink that deficit by any specific amount.

But it appeared to convince Trump to pull back a threat to levy $150 billion in tariffs on Chinese products, after offering to buy an unspecified amount of United States agricultural products.

U.S. and Asian markets dropped after the comments were posted. A person familiar with the discussions said the president has suggested seeking new tariffs up to 25 percent on automobile imports. Soybeans account for $14 billion of US exports to China.

Meanwhile, Trump signaled on May 23 that it would take more time and effort to conclude the final version of the US-Chinese trade agreement. "We're looking at the possibility of things turning around here". He referenced the president's requirement that trade issues with China must change.

The July soybean contract on the Chicago Board of Trade jumped 2.7 percent Monday. Yet, "incredibly", China appeared at this point to be winning, having thus far escaped the bulk of USA tariffs while giving up nearly nothing in return. Of all the fights Trump had picked over trade, he wrote, his hand against China appeared to be the strongest.

On Tuesday, 27 Democrat and Republican senators issued a letter to the Trump administration, insisting there must be no easing of controls on the export of technology to China as a means of reducing the USA trade deficit.

Is that what the US really wants, though, to become a raw material and agricultural products exporter like Russian Federation or Brazil? "Fair Trade, plus, with China will happen!" The USDA declined comment.

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Late last week, Japan's automakers' association urged its export partners to keep tariffs on vehicles and components low and maintain free trade relationships.

Those worries included fears that the uncertainty raised by USA involvement in a trade war could cause companies to postpone their plans to boost capital spending to expand and modernize their facilities.

Both sides claimed victory on Monday and pledged to continue talking after last week's round in Washington produced pledges that China would import more American energy and agricultural commodities so as to trim the $335 billion annual United States goods and services trade deficit with China, although there were no specifics.

The Journal, citing sources in the auto industry, said USA moves to retaliate likely would face significant opposition from trading partners and auto dealers that sell imports.

The U.S. sold about 33 million tons of soybeans in 2017 to China, or almost one-third of all the beans imported by the world's second-largest economy.

Last year, China imported more than 1.2 million vehicles, most of which were high-end SUVs, to account for some 4 percent of total sales.

Invoking the rhetoric of the Cold War, it said "fidelity to the rule of law" distinguished the USA "from a country like China that is ruled by a Communist dictatorship".

Likewise, after Trump signed the Taiwan Travel Act, which encourages official visits between the United States and the island, China staged war games against Taiwan and bribed the Dominican Republic to break diplomatic ties with the Taiwanese government.

The probe comes as Trump courts voters in the USA industrial heartland ahead of mid-term elections later this year, and opens a new front in his "America First" trade agenda aimed at clawing back manufacturing jobs lost to overseas competitors.

More recently, Trump moved the USA embassy in Israel from Tel Aviv to Jerusalem, despite a broad worldwide consensus to determine the contested city's status within the context of broader negotiations on a settlement of the Israeli-Palestinian conflict.

"It is South America right now", said Heisdorffer.

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