U.S. President Donald Trump sounded optimistic about prospects for a trade deal with China on Tuesday even as his administration readied 25 percent tariffs on all remaining Chinese imports with no new talks scheduled.
In early-morning tweets, Trump kept up his “America First” agenda in support of hefty tariffs and called on U.S. companies to back him by shifting their businesses away from China. But he also softened his tone on soybeans and other agricultural products, appealing to Beijing to act.
“When the time is right we will make a deal with China,” Trump said. “It will all happen, and much faster than people think!” he tweeted.
“Hopefully China will do us the honor of continuing to buy our great farm product, the best, but if not your Country will be making up the difference,” he wrote in post addressing U.S. farmers directly.
Trump said on Monday that he expected to meet with Chinese President Xi Jinping at a G-20 leaders summit in Japan in late June.
TARIFFS IN HAND
Based on an accelerated schedule laid out by the U.S. Trade Representative’s (USTR) office late on Monday, Trump will be in a position to launch 25 percent tariffs on another $300 billion worth of Chinese goods when he meets with Xi, adding potential leverage.
USTR said it would hold a public hearing on the tariff list on June 17, with final comments due as little as seven days later. 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.
As negotiations toward resolving the U.S.-China trade war stalled last week, Trump escalated pressure by increasing tariffs on Friday to 25 percent from 10 percent on a previous, $200 billion list of Chinese imports.
China retaliated on Monday with higher tariffs on a revised list of $60 billion worth of U.S. products
The prospect of the global economy being derailed by the United States and China sliding into a fiercer, more protracted dispute has rattled investors and sparked a sharp selloff on equities markets in the past week.
U.S. stocks were slightly higher on Tuesday on Trump’s more optimistic tone after a heavy sell-off on Monday. The Nasdaq was up 0.66%, the S&P 500 up 0.4% and the Dow Jones Industrials up 0.3%.
In China, the Shanghai Composite Index lost 0.7% and the blue chip CSI 300 fell 0.6% Tuesday. But both indexes rebounded from opening down 1%, supported by suspected state-backed purchases.
However, the onshore yuan weakened 0.1% to its lowest level since Dec. 27, 2018, trading at 6.8874 per dollar, after China’s Foreign Ministry said it hoped the United States does not “underestimate China’s determination and will to safeguard its interests.”
“My understanding is that China and the United States have agreed to continue pursuing relevant discussions. As for how they are pursued, I think that hinges upon further consultations between the two sides,” Chinese Foreign Ministry spokesman Geng Shuang told a daily news briefing, without giving details.
Sources have said talks stalled after China tried to delete commitments from a draft agreement that 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 reached an agreement in Washington but then the United States backed out a few days later.
“So you absolutely can’t put the hat on China of reversing positions and going back on one’s promises,” Geng said, adding China had shown goodwill in the talks and kept its promises.
The ruling Communist Party’s official People’s Daily said in a commentary that the United States needed to “give it a rest” with the complaints that it was losing out to China in the trade relationship because China was a hugely profitable market for U.S. companies.
“U.S. consumers, farmers, businesses and so on have become the victims of the trade frictions provoked by the United States. They are not victims of China’s ‘unfair competition’,” it said.
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