WASHINGTON: Donald Trump has denied a Chinese official’s assertion that his administration has agreed to roll back some of the higher tariffs it has imposed on Chinese goods.
The Chinese official said on Thursday that the two sides had agreed to a phased cancelation of their tariff hikes as part of an emerging agreement.
Trump’s pushback suggested that negotiations have not progressed as far as hoped as the world’s two biggest economies struggle to negotiate an end to their trade war, which has hurt both economies.
“They’d like to have a rollback,” Trump told reporters at the White House, referring to the Chinese. “I haven’t agreed to anything.”
The two sides have been working on an initial “Phase 1” deal that was announced Oct. 12 but that still is not final.
Financial markets in the US and globally rallied on Thursday at the prospect of an agreement to wind down the US-China trade fight, but then stumbled on Friday on Trump’s comments before eking out small gains. The Dow Jones Industrial Average finished up 6.44 points, or less than 0.1 percent, after shedding as many as 96 points earlier in the day.
Trump repeated his claims that China wants a deal more than the US and that America benefits from extra tariff revenue. The president says the tariffs are paid by China, but studies conducted since the duties were imposed find that Americans businesses and consumers are paying them.
“Frankly, they want to make a deal a lot more than I do,” Trump said. “I’m very happy right now. We’re taking in billions of dollars.”
A private sector source with knowledge of the talks said on Thursday that the US had agreed to suspend the duties Trump threatened to impose on Dec. 15 on about $160 billion of Chinese imports as part of the agreement. But there is dissension in the White House about whether and by how much to roll back 15 percent duties on another $112 billion of goods imposed Sept. 1.
FASTFACT
1.9% - US economic growth fell to 1.9 percent at an annual rate in the July-September quarter from 3.1 percent in the first three months of this year.
White House economic adviser Larry Kudlow also told Bloomberg News on Thursday that if a deal were reached, it would include reduced tariffs.
“The White House never speaks with one voice,” Mary Lovely, a trade economist at the Peterson Institute for International Economics, said on Thursday.
Despite Trump’s cavalier comments, analysts say the administration has plenty of incentives to reach a deal soon. Trump said last month that the “Phase 1” pact would include the purchase of tens of billions of dollars of US farm products by China, which would benefit farm states, many of which supported Trump in 2016.
The tariffs imposed in September covered clothes, toys, and shoes, raising prices for many widely used consumer goods.
And the Dec. 15 tariffs would mostly hit popular consumer products such as smart phones and laptops. Not only would that also raise consumer costs, but those tariffs would affect many products designed by US companies, for which China gets relatively little of the economic benefit.
“The December tariff round would largely hit products designed and marketed by multinational firms, mostly with components from the US and its allies, and assembled in non-Chinese-owned factories,” Lovely wrote on the Peterson Institute’s website .
The trade war stems from the Trump administration’s complaints that China is boosting its high-tech industries by stealing US technology or forcing American companies to share it as a condition of doing business there.
