As part of ‘Plan B’, Trump warns China of billions more in tariffs

June 27 | Updated on June 27, 2019

U.S. President Donald Trump waves while sheltering under an umbrella after exiting from Air Force One upon arrival at Osaka International Airport in Osaka, Japan, on Thursday, June 27, 2019. If President Trump and China’s Xi Jinping announce a new round of talks Saturday, as expected, any optimism ought to be balanced with a healthy dose of reality. Photographer: Kiyoshi Ota/Bloomberg   -  Bloomberg

If levied, the tariffs would be set at a rate of 10% instead of 25%

US President Donald Trump said substantial additional tariffs would be placed on goods from China if there’s no progress on a trade deal after his planned meeting with Chinese counterpart Xi Jinping at the G-20 Summit in Japan.

“My Plan B with China is to take in billions and billions of dollars a month and, well, do less and less business with them,” Trump said during an interview with Fox Business Network. The White House announced that his meeting with Xi would take place on Saturday in Osaka. 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.

There has been no change to China’s conditions for making a trade deal with the US as the two nation’s leaders prepare to meet, a government spokesman said in Beijing on Thursday.

An alternate course as the trade talks resume may be that US suspends the next round of tariffs on the additional $300 billion of Chinese imports, Bloomberg reported on Tuesday. If the tariffs on the broader set of goods does go into effect, it could be at a 10 per cent rate rather than 25 per cent, Trump said in the interview .

Trump criticised a range of trading partners in the interview, including Germany and Vietnam, whom he called as “abusers” when responding to a question about companies relocating production from China to that country following US-imposed tariffs.

Indian tariffs

Trump later took a shot at India, saying on Twitter he would ask Prime Minister Narendra Modi to withdraw an unacceptable increase in tariffs on US goods.

It was his first direct response to India’s move earlier this month to raise tariffs on a slew of products from walnuts to pulses, which was delayed since last year as Modi sought talks.

In the Fox Business interview, Trump 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 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 two leaders 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.

Published on June 27, 2019

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