Biggest Economies: Trade Talks Could be Ditched, Says Trump
BIGGEST ECONOMIES – In the midst of optimism and economic advisers’ claim of “fantastic” progress toward an agreement to end the trade war with China, US President Donald Trump warned that he could still ditch and walk away from a trade deal with the Asian country.
In a drastic exchange of threats and tariffs, the US and China have slapped tit-for-tat tariffs on hundreds of billions of dollars’ worth of goods. The dispute between the worlds’ top two economic powerhouses have disrupted financial markets and slowed down growth on the global level. It has disrupted manufacturing supply chains and shrank US farm exports.
“I am always prepared to talk,” said Trump in Hanoi after he cut short his meeting with North Korea’s Kim Jong Un. Kim and Trump failed to reach a nuclear deal. “I’m never afraid to walk from a deal. And I would do that with China, too, if it didn’t work out.”
The US has been getting ready to slap higher tariffs on some $200 billion in Chinese imports to 25 percent from 10 percent after Friday if no deal came into fruition by then. However, last Sunday, Trump announced that it would be delayed because of the progress between negotiating officials last week.
Afterward, some details regarding the discussions have surfaced.
According to White House Economic Adviser Larry Kudlow, “The progress last week was fantastic.” He also remarked that US Trade Representative Robert Lighthizer read Chinese officials “in riot acts” in talks last week.
“We are heading toward a remarkable, historic deal,” said Kudlow.
Chairman Kevin Hassett of the White House’s Council of Economic Advisers added that Lighthizer and Chinese Vice Premier Liu He drafted “sketches of an agreement on intellectual property theft and trade…that really makes sense for both parties.”
Lighthizer, who is Washington’s chief trade negotiator, was more cautious last Wednesday. In a testimony to the House Ways and Means Committee, he said that much work was still needed to seal a deal, adding that it was too soon to predict the outcome of such a high-profile negotiation.
Lighthizer also added that the US would need to maintain the threat in tariffs on Chinese imports for years even if the two powers come up with an agreement.
The chief negotiator added that the US is searching for a deal that forbids the Asian country from competitively devaluing its currency as part of the trade negotiations, succeeding the previous manipulations on the Chinese currency.
Additionally, China would be required to report any intervention in the forex market.
“The documents are very clear: I mean, even things like the currency deal…got no manipulation; they’ve got to report any interventions in the market. That’s part of it,” said Kudlow.
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