United States and China 'under pressure' to find tariffs compromise at G20

Ivan Schwartz
November 30, 2018

Trade and tariffs have been topics of increasing tension between the U.S. and China. "But frankly, I like the deal we have right now", Trump said.

U.S. President Donald Trump said on Thursday he was open to a trade deal with China but was not sure he wanted one, as he headed to Argentina for the G20 summit and a meeting with President Xi Jingping. My gut is always right.

Asked if China was seeking to prevent more United States tariffs at the high-stakes meeting, the ministry's spokesman, Gao Feng, said economic teams from both sides were in contact to implement a "consensus" reached by Trump and Xi in a phone call this month. "We have briefed the Prime Minister's Office on the current state of play the World Trade Organization where multiple challenges to India's subsidy program have been launched by USA authorities even as it spearheads efforts to deny a permanent solution to the question of public stockholding of foodgrains", a Commerce Department official said. He also suggested that if talks were unproductive, he would implement tariffs on even more Chinese goods. An additional $200bn of goods are subjected to 10 percent tariffs since September.

Earlier this week, Trump said he expected to move forward with a plan that would increase tariff rates on $200 billion worth of items from China at the beginning of next year. "If we do not show concrete progress, our global meetings become useless and even counterproductive", he said.

But the trade tensions are just a part of the picture.

This month's Asia Pacific Economic Cooperation (APEC) summit failed to reach consensus on a communique, so there is a question over whether world leaders will be able to reach an agreement at the G20, particularly around trade and climate change.

However, it has since expanded its agenda beyond economic and financial issues to encompass geopolitical matters and issues of peace and security, global governance, environment and worldwide terrorism. In 2011, Trump claimed "China is raping this country" during a tour of a defense manufacturer in New Hampshire, local media reported.

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If Apple does get hit with tariffs, the impact may not be profound. And in the renegotiated North American Free Trade Agreement, now called the U.S. -Mexico-Canada Agreement, countries drew up what's called a side-letter on autos to address the issue separately. In an unprecedented policy speech last month at the Hudson Institute, Pence had outlined a laundry list of U.S. concerns on China - from unfair trade practices and foreign interference to its regional aggressiveness in the East and South China Seas.

When attending the G-20 meeting of finance ministers in Argentina in July when he was treasurer, Morrison said China must share some of the blame for the trade war because of its unfair practices. This will provide the United States with two choices: double down on their pressure towards Beijing, or oversell any "deal" and claim it as another victory for the administration's America First policy.

This is true for several reasons.

In what was billed as a major policy speech on October 4, U.S. Vice President Mike Pence escalated Washington's trade-driven pressure campaign, highlighting Chinese military and industrial espionage activity and accusing China of "malign" efforts to undermine Trump in the November 6 mid-term congressional elections.

"Should there be any other aspirations, such as taking advantage of the trade spat to throttle Chinese growth, then an agreement is unlikely to be reached", the newspaper said in an editorial. Beijing has also been ramping up the pressure on Taiwan - picking off its last few diplomatic allies and enhancing its military capabilities in the Taiwan Straits.

Chang told Yahoo Finance there is enormous pressure on Xi that makes it hard for the Chinese leader to deal with the United States in good faith.

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Other reports by GizPress

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