His strategy of using trade tariffs as a tool for gaining strategic advantages in trade relations with other countries was defended by the United States president Donald Trump on Tuesday even as its trade war target China pledged to reciprocate appropriately if there is any escalation of the trade war by the US.
The trade war between the US and China was sparked off in mid 2018 as the US imposed trade tariffs on Chinese goods for the first time demanding large scale structural changes in the Chinese economy. In May this year, the trade war, which had been going on unabated since 2018, was escalated a few notched after the Trump administration accused China of going back on its promises during months of trade negotiations to brin gin structural changes in its economic practices.
“Tariffs are a great negotiating tool,” Trump tweeted a day after he had commented that he was not averse at implementing a fresh round of tariffs on China if no significant progress on a trade deal was made in his proposed meeting with the Chinese president Xi Jinping at the G20 summit at the end of June.
While Trump has been claiming on multiple occasions that he would be holding a one to one meeting with the Chinese president Xi Jinping at the G20 summit at Osaka in Japan at the end of June and hoped to finalize a trade agreement between the two countries, confirmation of such a meeting has not yet come from China.
Geng Shuang, the spokesman for the Chinese Foreign Ministry just said that the ministry would make such information available when they themselves get any. “China does not want to fight a trade war, but we are not afraid of fighting a trade war,” he said. “If the United States only wants to escalate trade frictions, we will resolutely respond and fight to the end.”
Last week Trump had said that the decision of whether or not to impose import tariffs on at least $300 billion of Chinese goods imported into the US would be taken by him after his meeting with Xi in Japan.
Analysts are of the opinion that the initial success that Trump has got in his tariff tirade against Mexico to pressurize the Mexican government to commit to taking strong measures to curb illegal immigrants into the US through Mexico has given him further confidence of using trade tariffs as a tool to pressurize other countries.
Last week trump threatened to impose tariffs on all products from Mexico – initially at 5 per cent and then rising to 25 per cent by October, over the issue of illegal migrants entering the US through its border with Mexico with Trump demanding that its Southern neighbor should do more to curb this flow of migrants primarily coming from Central American countries.
Import tariffs on Chinese products imported into the US worth about $200 was increased by the Trump administration from 10 per cent to 25 per cent on May 10, in addition to announcing certain measures to levy duties on an additional $300 billion of Chinese imports. Those fresh tariffs were retaliated by China by increase of tariffs on US products imported into the country worth $60 billion.
“At the G20, at most it will be … some sort of agreement on a path forward, but certainly it’s not going to be a definite agreement,” said U.S. Commerce Secretary Wilbur Ross to the media.
The same sentiments were echoed by the White House’s top economic adviser Larry Kudlow in an interview with a TV news channel. Kudlow said that the two sides were “about 90 percent home” on a “great deal” when the talks fell apart a month ago. “We’d like to go back to where we were a month ago, where we have a very good basis,” he added.
(Adapted from Reuters.com)