President Donald Trump warned on June 10 he will slap huge new tariffs on China if his counterpart Xi Jinping doesn’t show up for a planned face-to-face meeting later this month and insisted the Chinese economy will never overtake the United States.
Trump delivered his hardline message ahead of the G20 summit on June 28-29 in Osaka, Japan, which could mark a turning point in the trade dispute between the world’s two biggest economies.
Asked if a failure by Xi to come to the summit would lead to tariffs kicking in on a further $300 billion in Chinese imports, Trump told CNBC television: “Yes it would.” Trump said the meeting was “scheduled” and that he expects Xi to attend.
“I would be surprised if he didn’t go,” Trump said. “I think he’s going, I haven’t heard that he’s not.” However, as US-Chinese tensions mount, a spokesman for Xi’s government said last month that he had “no information at present” on Trump-Xi talks.
Trump has been trying to strong arm China into fundamental change on trade policies that the president argues have for decades put the United States at an unfair disadvantage.
The two sides seemed to be close to striking a bargain until talks stalled last month. Washington says that Beijing walked away at the last minute, while the Chinese side has signaled it is prepared for a long fight against unreasonable demands.
Trump has already imposed 25 percent duties on $200 billion of Chinese imports. China has responded with punitive tariffs on $60 billion in US goods. Last month he threatened to slap tariffs on a further $300 billion of goods — virtually everything American companies import from China — if no breakthrough is achieved.
The US Trade Representative office has launched the process to impose the huge new duties, with a hearing scheduled for June 17 — but Trump has said he has yet to decide whether he will ultimately impose the levies.
Trump has made tariffs a pillar of his foreign policy, arguing that US economic power puts him in a win-win situation when he threatens rivals like China and even close allies, such as Canada, the European Union and Mexico.
The United States says that China cheats in bilateral trade by forcing US importers to give up intellectual property, subsidizing its own companies, and running a huge trade surplus with Washington.
Trump told CNBC that by ratcheting up tariffs, he can ultimately force manufacturers to leave China.
“Those companies are going to move into other locations and there won’t be a tariff,” he said.
In a game of tit-for-tat, Trump added, China will lose simply because they have far fewer US imports they can target. “We have the big, big advantage,” he said.
“China’s going to make a deal because they’re going to have to make a deal.” Trump’s tariff rattling has spooked global markets and also run into pushback from many in Congress.
But in his lengthy CNBC interview, Trump said he is doing what previous presidents avoided because they “either didn’t understand it or they were bored by it or they weren’t smart enough.” His overall aim, the Republican said, is to ensure that China never overtakes the United States as the world’s top economy.
“Had a Democrat gotten in…, China would have caught us,” he said. Now “they’ll never catch us.”