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Trump says trade deal 'possible' with China's Xi, tariffs could be lower

EconomyJun 26, 2019 07:41PM ET
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© Reuters. FILE PHOTO: Workers load goods for export onto a crane at a port in Lianyungang

By Susan Heavey and Andrea Shalal

WASHINGTON (Reuters) - U.S. President Donald Trump said on Wednesday that a trade deal with Chinese President Xi Jinping was possible this weekend but he is prepared to impose U.S. tariffs on virtually all remaining Chinese imports if the two countries continue to disagree.

Trump, who departed for the G20 leaders summit in Osaka, Japan, on Wednesday, also raised the possibility that he may impose a lower, 10% duty on a $300 billion list of Chinese imports, instead of the proposed 25% rate.

Trump is expected to meet with Xi on Saturday in Osaka, a conversation that could revive stalled negotiations between the world's two biggest economies or launch a much deeper, costlier trade war that would drag down global growth and roil financial markets.

"It's absolutely possible. ... We have to get a good deal," Trump said in an interview with Fox Business Network. "It's possible that we'll make a deal, but I'm also very happy where we are now."

Relations between Washington and Beijing have spiraled downward since talks collapsed in May, when the United States accused China of reneging on pledges to reform its economy.

Trump said Chinese leaders "want to make a deal. They want to make a deal more than I do."

U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin are due to meet with Chinese Vice Premier Liu He ahead of the Trump-Xi meeting. U.S. Commerce Secretary Wilbur Ross also was added to the U.S. delegation at the last minute at Trump's request, a senior U.S. official said at a Washington event where Ross had been scheduled to speak.

Some Chinese officials who were not previously part of China's delegation were also applying for Japanese visas, an industry source briefed on the matter said, adding that this was a possible sign of momentum for the Trump-Xi meeting.

Shortly after Trump returns from the Osaka summit, he will be in a position to impose a 25% tariff on $300 billion worth of Chinese consumer goods from cellphones, laptop and tablet computers to tube socks and baby carriers.

A public comment period on the tariffs ends on July 2 following seven days of public hearings in which U.S. companies large and small begged to be spared from the tariffs and warned of hardships in shifting production out of China..

"I would do additional tariffs, very substantial additional tariffs, if that doesn't work, if we don't make a deal," Trump said on Wednesday. But he added that he could consider lowering the duty to 10% from the proposed 25%.

Administration officials have said that a 10 percent tariff is more easily offset by Chinese companies absorbing the added costs and by declines in the value of China's yuan currency.

China and the United States have already imposed tariffs of up to 25% on hundreds of billions of dollars of each other's goods in a trade war that has lasted nearly a year.

More than half of Chinese consumers have recently avoided U.S.-made products in support of their country, according to a new poll conducted by London-based advisory firm Brunswick. The poll of 1,000 Chinese and 1,000 American consumers showed that 68 percent of Chinese respondents said their opinions of American firms had become more negative, while 59 percent of Americans had an unfavorable opinion of China-based companies.

Global trade tensions contributed to a 2.1% drop in the April U.S. trade deficit to $50.8 billion as both imports and exports fell, the Commerce Department reported on Wednesday. But the April U.S. trade deficit with China jumped nearly 30% to $26.9 billion, while the trade gap with Mexico fell sharply.

Fitch Ratings on Wednesday forecast that imposing a 25% tariff on the $300 billion in Chinese goods would chop 0.4 percent from world economic output. The International Monetary Fund has forecast a 0.5 percent reduction, equivalent to erasing South Africa's economy.

Trump said China knows what the United States needs for a trade deal, and pushed for China to return to the negotiating table with the same concessions they had made before talks abruptly ended in May.

The two sides could agree not to impose new tariffs as a goodwill gesture to get negotiations going, a U.S. official said on Tuesday.

'DRIVE-BY TARIFFS'

Trump has bipartisan support on taking a tough stance on China, although not for his use of tariffs as a tool to exert pressure on Beijing.

A senior Democrat said on Wednesday he hoped the standoff with China would result in lasting changes.

"We’ve gone this far - we ought to be working to try and have some of the structural changes, some of the advantages, some of the (intellectual property) protections, and China living up to its obligations under the (World Trade Organization)," said U.S. Representative Earl Blumenauer.

Blumenauer, who chairs the House of Representatives' Ways and Means trade subcommittee, said he disagreed with what he called Trump's "drive-by tariffs" and hoped the president would not accept a deal that simply involved selling more goods to China rather than changing bilateral terms of trade.

Trump said if Washington was unable to reach a deal, his plan was to reduce business with China. Asked about companies relocating production from China to Vietnam, he said Vietnam treated the United States even worse than China.

The United States is cracking down on companies that have used countries such as Vietnam and Cambodia as staging posts to ship goods from China to the United States without paying tariffs.

Trump says trade deal 'possible' with China's Xi, tariffs could be lower
 

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joe jones
joe jones Jun 27, 2019 3:00AM ET
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Trump is such a wuss to give in like he is. He will now be considered a very weak president.
Andrew Hook
Andrew Hook Jun 26, 2019 11:59PM ET
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In case of having a deal what the market will do :more UP in that case Powell won't cut rates. So they are expecting a no deal ;)
Matthew NT
MatthewBT Jun 26, 2019 9:55PM ET
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From threatening 25% tariff, now Trump said 10%. Clear realization he is not able to spew lies about China paying tariff much longer when high tariff effect hit American public's purse.
James Pattison
James Pattison Jun 26, 2019 9:17PM ET
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I don’t buy made in China anymore
Andrew Hook
Andrew Hook Jun 26, 2019 9:17PM ET
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Goood boy.
David Wong
David Wong Jun 26, 2019 6:04PM ET
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Trump don't get it. China is now on another level. China does not need to make any deal if it is not fare. Xi will tell him to go home and think it over. If Trump don't comply. Chuna will X the deal and wait him out.
Fred Smith
Fred Smith Jun 26, 2019 1:53PM ET
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Easy win for USA. Businesses are leaving communist China
joseph mihalek
joseph mihalek Jun 26, 2019 12:30PM ET
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trade wars are NOT easy to win.in fact, NO ONE ever wins them...this dangerous psychopath has been saying the same thing for TWO.friggin years...the man is insane and has no idea what he is doing
Andrew Hook
Andrew Hook Jun 26, 2019 12:30PM ET
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Because XI is not his type ;)
Hank Williams
Hank Williams Jun 26, 2019 12:11PM ET
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Let's start seeing the percentages of the WS ters that are for the D-I-P style of management and those that are tired of it.
Matthew NT
MatthewBT Jun 26, 2019 11:59AM ET
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Trump playing poker... with American public's money.
Zhenguo Zhang
Jack_A Jun 26, 2019 10:44AM ET
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waiting for selling out?
Pedro Antunes
Pedro Antunes Jun 26, 2019 10:42AM ET
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china is a powerhouse and us can't compete with it.
Anastasi Michelle
Anastasi Michelle Jun 26, 2019 10:42AM ET
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Yeah
Hank Williams
Hank Williams Jun 26, 2019 10:42AM ET
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Whatever it takes to keep the stock market up right KT.
Zhenguo Zhang
Jack_A Jun 26, 2019 10:07AM ET
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you can tariff now and see the effect. just don't give US a recession. What an expensive lesson!!
Fred Smith
Fred Smith Jun 26, 2019 9:43AM ET
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Companies are moving out of China due to tariffs. Trump can now hit them 100%
David Wong
David Wong Jun 26, 2019 9:43AM ET
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Very small number moved out. China is the defacto country at prodcuing and there are no country that can replace the might of 1.4B chinese. China has invested trillions over decades on their infrastructure, there is no way another country can replace them.
Erlend KH
Erlend KH Jun 26, 2019 9:17AM ET
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It's worth noting the "would" phrasing in the title, though I honestly found it to be misleading. Trump won't impose the extra tariffs today, but he "would" do it IF a trade deal isn't made or the talks don't make any genuine progress during the G20 summit.
David Wong
David Wong Jun 26, 2019 8:56AM ET
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China said bring it ... they are ready if Trump wants $300B tarriffs. If Trump does that, we can guaranteed US will be in a recession. And it is not China that pays, but US businesses which would then pass the cost to consumers.
Show previous replies (2)
northern rider
northern rider Jun 26, 2019 8:56AM ET
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Steve Bucher. . To David Wong and Steve Bucher, you are both right. The only winner is the Government who is collecting the tariffs.
Che Tran
Che Tran Jun 26, 2019 8:56AM ET
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Steve, it's not stealing. it's the condition of doing business in China. if a company doesn't like the condition, then don't do business there like Google. it's not that hard to get, even my 3 year old understands conditions associated with an act.
Alex Fernandez
Alex Fernandez Jun 26, 2019 8:56AM ET
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look at the context of Wong's.
Big Eyes
Big Eyes Jun 26, 2019 8:56AM ET
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Che Tran exactlly so. Only Americans can't understand this. We Europians, we don't hurry in China for any cost. And Chinese come and buy what they need in Eyrope, without IP transfer. And sell in Europe as Chinese.. But US companies want to be "at home" in Chinese market and this doesn't work so, because Chna wad always different world. Not hostile, but different. Europe understand this,
Al Vlaj
alvlaj Jun 26, 2019 8:56AM ET
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Speaking as an American, i would say a vast number of us do get that. We are currently though in an unfortunate situation where many others in the country think glut consumerism is the same in all other countries.
Andrew carson
Andrew carson Jun 26, 2019 8:55AM ET
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What happened to the 90 percent? LOL.
Tony Moore
Tony Moore Jun 26, 2019 8:55AM ET
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Good question
Pwr Strk
Pwr Strk Jun 26, 2019 8:55AM ET
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LOL, the question is (90% complete) to fail or not to fail.
Torres Chen
Torres Chen Jun 26, 2019 8:55AM ET
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90 percent lie..10percent apologize
 
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