Trump threatens more tariffs on China if trade deal fails

D Ravi Kanth Geneva | Updated on November 20, 2019

US President Donald Trump   -  AFP

Issues such as quantum of Chinese purchase of American agricultural products, and Beijing’s demand for removal of previously imposed tariffs on Chinese products, yet to be resolved

Trade talks between the US and China are likely to hit a roadblock. US President Donald Trump threatened on Tuesday that he would stop negotiations and impose unilateral tariffs on Chinese products if China fails to agree to a trade deal on the American terms.

“China is going to have to make a deal that I like,” Trump told reporters at the outset of a meeting with his Cabinet on Tuesday, according to a report in Washington Trade Daily.

“If they don’t, that’s it. Okay? I'm very happy with China right now. They’re paying us billions and billions,” he claimed, suggesting that the US will gain “a hundred billion dollars in the not-too-distant future.”.

The US and China were scheduled to conclude a “phase one” trade agreement, but negotiations continue without any sign of a final deal. “If we don’t make a deal with China, I'll just raise the tariffs even higher,” Trump threatened.

The US is set to impose a new round of tariffs on Chinese products on December 15. That tranche of tariffs will largely hit consumer goods at the height of the holiday shopping season.

The two sides are yet to resolve their differences on core issues such as the quantum of Chinese purchase of American agricultural products, and Beijing’s demand for the removal of previously imposed tariffs on Chinese products.

The US Trade Representative Ambassador Robert Lighthizer, who is known to be a China hawk, apparently is not willing to commit to the removal of tariffs imposed by Washington on Chinese goods at this juncture, according to media reports in the US.

In addition to the differences over the quantum of farm purchases by China, differences seem to have surfaced over “the US demands for a strong enforcement mechanism for the deal and curbs on the forced transfer of technology for companies seeking to do business in China,” according to a report in the Wall Street Journal.

Industrial subsidies

The US also wants China to stop giving industrial subsidies to its leading technology enterprises and commit for stringent intellectual property rules that would include mandatory transfer of technology.

China has demanded a balanced and equitable deal in which the two countries must have proper enforcement mechanism unlike the unequal treaties that ruled the roost in the 19th and 20th centuries. China also doesn’t want to commit on a numerical target for purchases of American farm products in the phase-one agreement that ought to have been signed by the two parties by now.

Last month, President Trump had boasted that China would buy farm products and pork worth $50-60 billion from the US producers, claiming that it would be a bonanza to the American farmers.

Separately, a bipartisan group of Senators introduced a legislation in the US Senate on Tuesday that would give the Commerce Department more flexibility in cracking down on unfair trade practices by China and other non-market economies.

The Play by the Rules Act that is being considered by the US Senate would provide commerce additional flexibility when reviewing anti-circumvention petitions filed against non-market economies like China.

Subsidies on steel

In another unrelated development at the WTO on Tuesday, the US, along with the European Union, Japan, and Canada expressed sharp concern over the Chinese government subsidies to the steel and other industries.

At a meeting of the WTO’s committee on subsidies and countervailing measures, the US said global talks to address overcapacity in steel at the OECD were being hindered because some countries failed to provide “timely and comprehensive information about measures affecting the steel sector.”

Published on November 20, 2019

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