JAKARTA (TheInsiderStories) – President Donald Trump said last weekend that the next round of trade negotiations between the United States (US) and China may not happen, casting doubt on hopes that the two sides could dodge sweeping escalations set to take place in September.
Asked by reporters on the South Lawn whether the planned talks in Washington next month would be canceled, Trump replied: “Maybe. We’ll see what happens.”
Trump also announced Monday (08/12) the US would cut ties with Huawei, a Chinese telecommunications and smartphone giant that has become a bargaining chip at the center of trade negotiations. While he added that ban could change if a deal were reached, the prospect of de-escalation has dimmed in recent days.
Trump has insisted that China “badly” wants a trade deal even though talks in Beijing turned to the prospect of a protracted and wider confrontation.
On Saturday the president tweeted that “China wants to make a deal so badly. Thousands of companies are leaving because of the Tariffs, they must stem the flow. At the same time China may be hoping for a Democrat to win so they could continue the great ripoff of America, & the theft of hundreds of Billions of $’s!”
Despite Trump’s latest Twitter comments, the prospects for a deal between the two sides appeared to have dimmed last week after Washington officially labeled China as a currency manipulator, following Beijing’s decision to let the yuan exchange rate to weaken beyond the symbolic level of seven yuan to the dollar.
Trump said the meeting among US Trade Representative Robert Lighthizer, Treasury Secretary Steven Mnuchin, and their Chinese counterparts were currently scheduled to take place. But he also emphasized that he was not ready to make any deal. Tariffs on another US$300 billion worth of Chinese imports are scheduled to take place on September 1.
It marked an escalation of trade tensions between the world’s biggest economies after Beijing suspended its purchases of US farm products. The Chinese government has repeatedly rejected Trump’s claims that tariffs are causing an exodus of businesses from China and has also dismissed his accusations that China is ripping off or stealing from the US.
It is now an open question whether the next round of talks between the two sides, scheduled to be held in Washington next month, will take place although neither side has officially called off the meeting.
Angry at China for not following through with a pledge to buy more agricultural products from the US, Trump announced plans to raise tariffs on Thursday. China has sought to reduce its reliance on American farmers in an effort to retaliate against the Trump administration.
China has continued to respond with countermeasures, suggesting this week it would wield the agricultural market and its currency against the US. The Treasury Department named China a currency manipulator in a rare move Monday after the yuan fell beyond the psychologically important level of seven against the dollar.
On Saturday, Chen Yuan, the former chairman of the China Development Bank, the country’s biggest policy lender, told a financial forum that the trade war had escalated into “a financial war” after Washington labeled China as a currency manipulator.
“The financial war started with the exchange rate dispute. [It] will have a far greater impact than a pure trade war in terms of depth, width and the scope of influence,” he told the event organized by the think tank Finance 40 Forum.
Huang Yiping, an economics professor at Peking University, told the event in Heilongjiang province that China should stick to its own agenda and must not allow Trump’s trade war to “disrupt our progress”.
Huang suggested that China should consider policies that “if it is finding the United States hard to deal with” it should consider offering favorable trade policies towards other countries to win their support.
Separately, the China Institutes of Contemporary International Relations, a state think-tank, held a symposium last Friday about China’s approach towards a trade war, which concluded that China had the capability and power to stand firm Economic Daily reported. It said the trade war had significantly increased the risk of a recession in the US.
Written by Lexy Nantu, Email: email@example.com