Neither the United States nor China have backed down since trade negotiations between the two powers reached a standstill in May. As world leaders gather in Osaka, Japan, for the G20 Summit, the U.S.-China trade dispute looms over the world economy.
U.S. and Chinese delegations are scheduled to meet on Saturday, June 29, with both President Trump and Party Secretary Xi Jinping expected to be present. However, few expect their standoff on trade to be resolved quickly.
President Trump wants safeguards put in place to protect American businesses from corporate spying and theft of intellectual property. He would also like to see structural changes in China’s economy that make it more “open” and friendly toward foreign investment, though more details have yet to be divulged.
In May, the Trump administration accused China of reneging on agreements made during prior rounds of trade negotiations, and on May 10, began to impose tariffs on upwards of $250 billion worth of Chinese imports, affecting a range of products, from textiles to chemicals to electronics. The tariff initially began at 10%, but could be increased to as high as 25% in the coming year if a new trade agreement is not put in place.
China’s leadership has resisted the U.S. demands thus far, and retaliated against the U.S. tariffs by imposing tariffs of their own on $60 billion in U.S. imports to China, effective June 1. The Chinese tariffs primarily have affected U.S. agricultural exports.
Both the U.S. and China insist they can outlast the other if a trade war continues to escalate.
‘Prepared for any outcome’
According to U.S. Treasury Secretary Steven Mnuchin, who spoke with CNBC on Wednesday, June 26, the Trump administration goes into Saturday’s meeting “prepared for any outcome.”
“The message we want to hear is that they want to come back to the table and continue, because I think there is a good outcome for their economy and the U.S. economy to get balanced trade and continue to build on this relationship,” Mnuchin explained.
In an interview with Fox News, on Wednesday, Trump maintained that he is comfortable with imposing tariffs on China. He indicated that he is prepared to introduce a second round of tariffs on an additional $300 billion in Chinese imports, should a new trade deal fail to move forward.
“This never happened to China,” Trump explained. “Now what is happening is people are moving out of China. Companies are moving out of China. By the way, some are coming back to the United States because they don’t want to pay the tariff, etc. It’s been an incredible thing. Am I happy now? Absolutely. Now I would do additional tariffs, very substantial additional tariffs … if we don’t make a deal.”