Nation & World

Trump pushes back on reports U.S. will remove China tariffs

Workers pack imported lobsters July 12, 2018, at the Jingshen seafood market in Beijing. Chinese imports of U.S. goods fell 14.3% from a year earlier to $9.4 billion, customs data showed Friday.
Workers pack imported lobsters July 12, 2018, at the Jingshen seafood market in Beijing. Chinese imports of U.S. goods fell 14.3% from a year earlier to $9.4 billion, customs data showed Friday.

WASHINGTON – President Donald Trump on Friday dismissed a Chinese official’s assertion that his administration has agreed to roll back some of the higher tariffs it’s imposed on Chinese goods.

The Chinese official said Thursday that the two sides had agreed to a phased cancellation of their tariff increases as part of an emerging agreement.

Trump’s pushback suggested that negotiations haven’t 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 isn’t final.

Financial markets in the U.S. and globally rallied Thursday at the prospect of an agreement to wind down the U.S.-China trade fight, but then stumbled 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%, after shedding as many as 96 points earlier in the day.

Trump repeated his claims that China wants a deal more than the U.S., and that the U.S. benefits from extra tariff revenue. The president said the tariffs are paid by China, but studies conducted since the duties were imposed find that American 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 Thursday that the U.S. has agreed to suspend the duties Trump threatened to impose 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% duties on another
$112 billion of goods imposed Sept. 1.

Larry Kudlow also told Bloomberg News on Thursday that if a deal was 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 Thursday.

Despite Trump’s cavalier comments, analysts have said 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 U.S. 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 mostly would hit popular consumer products such as smartphones and laptops. Not only would that also raise consumer costs, but those tariffs would affect many products designed by U.S. 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 United States 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 seeking to unfairly boost its high-tech industries by stealing U.S. technology or forcing American companies to share it as a condition of doing business there. Most business groups and China trade experts agree that China has violated trade rules, and they largely have supported the administration’s tougher line.

Still, the tariffs have hurt both countries’ economies. China’s growth slowed to an annual rate of 6% last month, a healthy pace for more advanced economies but China’s slowest in three decades.

In the U.S., businesses have cut their investment spending in new plants and equipment for two straight quarters, which has lowered U.S. economic growth to 1.9% at an annual rate in the July-September quarter from 3.1% in the first three months of this year.

A report released Wednesday by a trade group opposed to the duties found that Americans paid $7.1 billion in tariffs in September, a record high for a single month.

Once a “phase 1” deal is reached, the two sides will still need to decide where the two leaders – Trump and China’s Xi Jinping – will sign the pact. Trump said Friday that they could hold a summit in Iowa or elsewhere in U.S. “farm country.”

Copyright 2020 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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