U.S. President Donald Trump threatened Monday to impose tariffs on another $325 billion worth of imported goods from China if Chinese President Xi Jinping does not engage in new trade talks with him later this month.
Trump told CNBC he expects to meet with Xi in Osaka, Japan at the G-20 meeting of the leaders of the world’s largest economies on June 28-29, but Beijing has not publicly confirmed the meeting. Trump said he would impose the new tariffs, on top of tariffs he already has levied on $200 billion worth of Chinese exports, if Xi skips the meeting.
“I think he’ll go,” Trump said. “We’re expected to meet.”
The U.S. leader said, “China very much wants to make a deal, more than I do.”
But months of trade talks between the world’s two largest economies have stopped, at least for the moment. Washington has accused Beijing of reneging on various terms the United States thought they had agreed on, although China has rejected the claim.
China’s Foreign Ministry said, “We do not want a trade war, but we are not afraid of fighting one. If the U.S. is ready to have equal consultations, our door is wide open. But if it insists on escalating trade frictions, we will respond to it with resolution and perseverance.”
Trump’s threat about Chinese tariffs came amid growing concern by some business leaders questioning whether he is misusing tariffs — or the threat of imposing them — in ways that could hurt the U.S. economy. Trump on Friday backed off a threat to impose a 5% tariff on Mexican imports if its southern neighbor did not ramp up efforts to curb the surge of Central American migrants traveling through Mexico to the United States. The two countries reached an agreement calling for tighter migration controls.
Trump called in to the business news network unexpectedly after an earlier segment in which a U.S. Chamber of Commerce executive criticized Trump for his tariff threats against Mexico.
“If we didn’t have [the threat of] tariffs, we wouldn’t have made a deal with Mexico,” Trump said. “The China deal is going to work out. You know why? Because of tariffs.”
He added, “Right now China is getting absolutely decimated by companies that are leaving China going to other countries, including our own, because they don’t want to pay the tariffs. And China will, in my opinion, based on a lot of facts and a lot knowledge, China’s going to make a deal because they’re going to have to make a deal.”
U.S. Treasury chief Steven Mnuchin said Sunday that Trump would be “perfectly happy” to tax more imports from China if he cannot reach a trade deal with Xi.
“We made enormous progress, I think we had a deal that was almost 90% done,” Mnuchin told CNBC. “China wanted to go backwards on certain things.”
“I believe if China is willing to move forward on the terms that we were discussing, we’ll have an agreement,” Mnuchin said. “If they’re not, we will proceed with tariffs.”
G-20 finance ministers meeting in Fukuoka, Japan, over the weekend said trade and geopolitical conflicts are risking global economic growth, but at the U.S. insistence, dropped a call to “recognize the pressing need to resolve trade tensions.”
“Global growth appears to be stabilizing and is generally projected to pick up moderately later this year and into 2020,” the finance chiefs, including Mnuchin, said in an end-of-meeting communique. “However, growth remains low and risks remain tilted to the downside. Most importantly, trade and geopolitical tensions have intensified. We will continue to address these risks and stand ready to take further action.”
The International Monetary Fund warned last week that a continuing U.S.-China standoff on tariffs could cut a half-percentage point from the global economy in 2020.
Meanwhile, China vowed Sunday to build what it calls a strong firewall against attempts to restrict its ability to technologically innovate.
“China … will never allow certain countries to use China’s technology to contain China’s development and suppress Chinese enterprise,” the main state-run newspaper declared.
China plans to announce details of its plans in the near future.
The Chinese statement did not mention any country by name, but the United States has restricted U.S. firms from selling technology to China’s Huawei, suspecting the company of building spyware into its telecommunications products.
The United States has also warned its allies against the alleged risk in buying Huawei technology.
Trump said concerns over Huawei could be dealt with in a new trade deal.