President Donald Trump said the United States (US) - China trade deal remains in place shortly after a senior said on national television that the agreement was over - Photo by Xinhua

JAKARTA (TheInsiderStories) – United States (US) President Donald Trump on Tuesday (01/21) hailed trade relations with China, saying negotiations with Beijing on phase two of the trade deal will start shortly and asserted that the two countries never had a better relationship despite the recent rough patch. Last week, the world’s two biggest economies signed the long-awaited phase one agreement, marking a truce after nearly two years of tensions.

“Our relationship with China has probably never been better. We went through a rough patch,” Trump said at the World Economic Forum in Davos, Switzerland. “My relationship with Chinese President Xi Jinping is extraordinary. He’s for China, I’m for the US but other than that we love each other,” he added.

With Xi again opting to skip the event in Davos, having last attended in 2017, Trump’s comments on Tuesday came less than a week after the US president signed the phase one trade deal with Vice-Premier Liu He in Washington.

“Before I was elected, China’s predatory practices were undermining trade for everyone, but no one did anything about it apart from allowing it to keep getting worse, and worse, and worse,” Trump told the forum, which saw another vice-premier, Han Zheng, leading the China delegation this year.

“Under my leadership, America confronted the problem head-on. Under our new phase one agreement, phase two is starting negotiations very shortly, China has agreed to substantially do things they would not have done.”

As part of the deal, China has agreed to buy additional US$200 billion of American goods and services, enhance intellectual property rights protection, open its financial services market to US institutions, and keep the yuan exchange rate stable.

The US, in turn, has agreed not to impose threatened new tariffs on Chinese goods, while also scaling back certain tariffs on Chinese products, although the bulk of the tariffs already in place have remained.

Following the signing of the deal, China quickly rejected Trump’s proposal that the phase two talks should start immediately, with Vice-Premier Liu saying shortly after the signing ceremony that it would be “unwise” to start a new round of negotiations and that the focus should be on implementation of the phase one deal.

A phase two deal is expected to lead to a rollback of billions of dollars of tariffs that the US first slapped on China in 2018. Trump has said he may want to wait until after the election to sign a phase two trade deal, and there hasn’t been a clear timeline from the White House as to when an agreement can be reached.

During his speech, Trump reaffirmed that tariffs on China will remain in place and noted that these trade barriers have been a key negotiating tool.

“These achievements would not have been possible without the implementation of tariffs, which we had to use. And we’re using them on others, too,” Trump said. “That is why most of our tariffs on China will remain in place during the ‘phase two’ negotiations.”

Last week, a day after the deal with China was signed, the US Senate also approved the revised United States-Mexico-Canada-Agreement, with Trump set to sign that deal next week.

“Today I’m proud to declare the United States is in the midst of an economic boom, the likes of which the world has never seen before,” Trump said in his speech in Switzerland. “America is thriving. America is flourishing and yes, America is winning again like never before.”

Written by Lexy Nantu, Email: lexy@theinsiderstories.com