(FILE) - US President Donald J. Trump (L) and Chinese President Xi Jinping (R) shake hands during a press conference at the Great Hall of the People (GHOP) in Beijing, China, 09 November 2017 (reissued 04 January 2019). EPA-EFE/ROMAN PILIPEY Trump has previously said he may decide to raise tariffs on the remaining $300 billion of Chinese imports if he doesn’t like what he hears from Xi at this weekend’s summit in Osaka. Asian stocks edged up Thursday ahead of the highly anticipated meeting.
The president’s latest remarks added an element of doubt to Treasury Secretary Steven Mnuchin‘s comment earlier Wednesday on CNBC that he’s “hopeful” about U.S.-China trade negotiations.
An alternate course as the trade talks resume may be that U.S. suspends the next round of tariffs on the additional $300 billion of Chinese imports, Bloomberg reported Tuesday. If the tariffs on the broader set of goods does go into effect, it could be at a 10% rate rather than 25%, Trump said in the television interview Wednesday.
“My plan B’s maybe my plan A, my plan B is that if we don’t make a deal I will tariff, and maybe not at 25%, but maybe at 10%,” Trump said in the interview Wednesday.
Trump criticized a range of trading partners in the interview, including Germany and Vietnam, which he called an “abuser” when responding to a question about companies relocating production from China to that country following U.S.-imposed tariffs.
The president said he likes China and Xi but added: “They have taken advantage of us for so long.”
“They devalue their currency like a ping-pong ball,” he said.
Xi comes to Osaka with a more vulnerable economy behind him. The expansion in the world’s second-largest economy continued to weaken in June, according to a Bloomberg Economics gauge of business conditions and market sentiment. In particular, the smaller-scale, private companies that form the backbone of the economy are seeing their outlook worsen.
The talks between the leaders of the world’s two largest economies mark a critical juncture in their trade war, which has gone on for more than a year, and both sides have plenty to lose if it escalates.
No detailed trade deal is expected from the leaders’ summit, a senior U.S. administration official said Tuesday. The goal of the meeting is to create a path forward for a trade agreement, after negotiations broke down last month. That’s when Trump decided to increase tariffs on $200 billion in Chinese imports, and threatened to target the remaining $300 billion with duties of as much as 25%.