Business

Trump sees slowing Chinese growth pressuring Beijing on trade as U.S. tariffs have 'major effect'

Reuters

U.S. President Donald Trump on Monday seized on slowing economic growth in China as evidence that U.S. tariffs were having “a major effect” and warned that Washington could pile on more pressure as bilateral trade talks sputtered along.

Data released earlier on Monday showed growth in the world’s second-largest economy had slowed to 6.2 percent in the second quarter, its weakest pace in at least 27 years, amid ongoing trade pressure from the United States.

“This is why China wants to make a deal with the U.S., and wishes it had not broken the original deal in the first place,” Trump tweeted.

Trump and Chinese President Xi Jinping last month agreed to another truce in the year-long trade spat between the world’s two largest economies. That agreement, announced after the leaders of the world’s two largest economies met in Osaka, Japan, was aimed at kick-starting stalled negotiations, but no deadline has been set for the process to conclude.

The U.S. president has grown increasingly frustrated that China has not delivered on what he viewed as a promise to start buying more U.S. agricultural goods, even as talks continued.

However, sources familiar with the state of negotiations insist the Chinese side did not make firm commitments at the meeting to immediately purchase agricultural commodities.

Adding to mounting pressure on China, Trump will sign an order on Monday seeking to increase the U.S. domestic content threshold for iron and steel in federal procurements, White House trade adviser Peter Navarro said on Fox News.

The move, which aims to boost the threshold from 50 percent to 95 percent, comes amid continued concerns over overproduction by China, the world’s biggest steel producer.

Official data showed that China’s daily crude steel output rose to record levels in June, according to Reuters calculations, even as anti-pollution production curbs pushed whole-month production slightly lower.

U.S. and Chinese trade negotiators spoke by phone last week, and U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will travel to Beijing “in the very near future,” Navarro said last week.

No date for the meeting has been announced.

“We have no scheduling announcements at this time,” a spokesman for Lighthizer’s office said.

Mnuchin will be in France this week to participate in a meeting of finance ministers from the Group of Seven nations (G7) — the United States, Canada, France, Germany, Italy, Japan and Britain, the Treasury Department said.

One source familiar with the negotiations said the U.S. side wants China to clarify what negotiating document will form the basis for the talks before locking in a firm date for the in-person meeting.

Meanwhile, the Chinese Embassy in Washington, and Ambassador Cui Tiankai, have launched their own separate Twitter accounts, keen to amp up visibility in the U.S. capital for Beijing’s views on the trade talks, Taiwan and other issues.

Cui already has 10,600 followers, less than a week after getting on the social media platform.