Business

Trump eyes slapping more tariffs on China; talks with Mexico, EU ongoing

AFP-JIJI, Reuters

President Donald Trump on Friday threatened to slap tariffs on all Chinese goods imported into the United States, ramping up already tense trade relations with Beijing amid ongoing talks with Canada and the EU.

His comments — which contradicted the more diplomatic remarks earlier Friday from his top economic adviser — sent the stock market plunging amid fears of the economic damage that could result from the multifront trade war he pursues.

The United States already has punitive tariffs on $50 billion in Chinese goods in place, and Trump said another $200 billion are “in the hopper” and “could take place very soon.”

He told reporters traveling with him to Fargo, North Dakota, that “behind that, there’s another $267 billion ready to go on short notice if I want.”

That would cover virtually all the goods imported from the world’s second-largest economy.

“That totally changes the equation,” Trump said.

Just hours before, White House economic adviser Larry Kudlow said talks with Beijing were continuing to try to defuse the conflict and that he was hopeful that a solution could be found.

There have been more positive signs in talks with North American partners as well as with the European Union. U.S. Trade Representative Robert Lighthizer held another day of meetings with Canadian Foreign Minister Chrystia Freeland on a rewrite of the North American Free Trade Agreement, after reaching a deal a week ago with Mexico. However, Freeland left Washington without a deal in hand, and the schedule for any future talks was uncertain.

Lighthizer is to meet Monday in Brussels with EU Trade Commissioner Cecilia Malmstrom to resolve the dispute ignited when Trump imposed steep duties on all steel and aluminum imports.

And Freeland is due to attend a Liberal Party meeting on Wednesday and Thursday prior to the opening of Parliament.

Trump said talks with Canada to revise the 25-year-old North NAFTA are “moving along” but again called the agreement “one of the worst trade deals in history.”

“Canada has been ripping us off for a long time. Now, they’ve got to treat us fairly,” he said, and again threatened to impose duties on cars produced in Canada.

Washington is pushing to sign a revamped NAFTA before Dec. 1, when the next president takes over in Mexico City.

Following meetings on Friday, Freeland told reporters the issues were “complicated” but that officials are working “really at this point 24/7.”

The NAFTA talks between Washington and Ottawa have been hung up over Canada’s insistence on retaining a dispute resolution mechanism in Chapter 19 and U.S. objections over Ottawa’s tight controls over the dairy market.

Trump said on Friday: “China, right now, is a far bigger problem. I’m being strong on China because I have to be.”

The deadline for public comment on the next wave of punitive taxes on $200 billion of annual imports from China expired Thursday, so Trump could impose the tariffs immediately.

He previously had threatened to hit 100 percent of imports from China if the country failed to address U.S. concerns over theft of U.S. technology and barriers to American goods and investments.

Trump has had Beijing in his crosshairs since he took office and has applied increasing pressure to try to convince it to change its policies, allow more U.S. imports and reduce the $335 billion U.S. trade deficit with China.

Customs data released on Saturday showed that China’s trade surplus with the United States widened to a record $31.05 billion in August.

The amount surpassed the previous record of $28.93 billion, set in June. July’s surplus was $28.09 billion.

The August surplus with the U.S. was larger than China’s overall surplus of $27.91 billion for the month.

China so far has retaliated dollar-for-dollar with tariffs of its own on U.S. goods, but since it imports less than $200 billion in goods a year from the United States, it has run out of room to match the punitive measures.

But businesses warn that there are other ways China can strike back, through regulations and other administrative means, or even through sales of its large holdings of U.S. Treasury debt.

The last effort at a negotiated solution came in late August with meetings between low-level officials, but nothing came of it.

In Beijing, the Commerce Ministry said Thursday it is ready to retaliate.

“If the U.S. dogmatically implements any new tariff measures against China, China will have to take the necessary countermeasures,” commerce spokesman Gao Feng told reporters.

Those steps include slapping tariffs on $60 billion of U.S. imports, Gao said.

In Beijing, Premier Li Keqiang said Friday that China will continue opening up and improving market access, adding that he hopes U.S. firms will boost investment, state television reported.

It broadcast images of Li meeting Exxon Mobil Corp. Chief Executive Darren Woods in Beijing and quoted Li as saying during the meeting that China will treat foreign and local firms equally and urging all countries to jointly safeguard free trade and investment.