Donald Trump has claimed Beijing is seeking talks on a deal to end a trade war between the US and China that has spooked financial markets and stoked fears of a global economic slowdown.
The US president said on Monday that he was optimistic about the prospects for an agreement with Beijing, 24 hours after he appeared to suggest he was having second thoughts about imposing further tariff rises on China.
"China called last night our top trade people and said, 'let's get back to the table', so we'll be getting back to the table, and I think they want to do something," he said on the margins of the G7 summit in the French coastal resort of Biarritz.
“I have great respect for the fact that China called – they want to make a deal. This is the first time I’ve seen them where they really do want to make a deal, and I think that’s a very positive step.”
The remarks are the latest twist in an uncertain few days over US trade policy towards Beijing. China's official currency the renmibi weakened on Monday to a new 11-year low and stock markets in Asia-Pacific fell sharply after the White House on Sunday suggested that Mr Trump in fact wanted to raise tariffs on Chinese goods even higher. However, global markets stabilised after Mr Trump said China had requested further talks.
Mr Trump praised Xi Jinping, China’s president, but gave no details of the alleged Chinese overture on trade talks.
“They’ve been hurt very badly but they understand this is the right thing to do,” he said.
There was no immediate response from Beijing. In separate remarks on Monday, Liu He, Chinese vice-premier, said China did not want further trade hostilities with the US.
“China...resolutely opposes the escalation of the trade war,” he said. “An escalation of the trade war is not good for China, it’s not good for the US, and it’s also not good for the interests of people across the world.”
China has never officially threatened to stop talking to the US on trade, despite the rhetoric from Washington. Beijing has expected negotiations would start next month.
Tariff war
Mr Trump grabbed attention on Sunday in Biarritz when he appeared to suggest a possible rethink over widening the trade tariff war with China, just two days after increasing duties on almost all Chinese imports.
Beijing also slapped higher levies on some US products. Asked if he was having second thoughts about imposing additional levies on Beijing, the US president said he was.
“I have second thoughts about everything,” he added.
But a White House spokesperson later said Mr Trump’s answer had been “greatly misinterpreted”, and that the president wanted to pursue an even more aggressive trade policy towards China.
“President Trump responded in the affirmative – because he regrets not raising the tariffs higher,” the spokesperson added.
If imposed, the tariffs threatened by Mr Trump on Friday would reduce China's economic growth by 0.2 per cent in 2019 and roughly 0.3 per cent in 2020 when annual growth will likely fall below 6 per cent, said Louis Kuijs of consultancy Oxford Economics.
“China is increasingly focused on preparing itself for long-term economic tension with the US, and less on trying to achieve a deal,” he added.
– Copyright The Financial Times Limited 2019
