Trump Says U.S. Deserves Better China Treatment: Trade Update
(Bloomberg) -- President Donald Trump’s push to rebalance global trade in America’s favor has investors on edge, as his threats to impose import tariffs and curb foreign investment raise the specter of retaliation that could spark a global trade war.
U.S. stocks continued rising Thursday afternoon after American and Chinese officials the previous day indicated a willingness to find a negotiated solution to their trade spat. But neither side has announced plans to hold formal talks to stop them from imposing tariffs on each others’ goods.
Here are the latest developments on trade from Washington, updated throughout the day:
Trump Says Deserves Better Treatment from China (2:49 p.m.)
President Donald Trump called Chinese President Xi Jinping a “friend” but said it’s time to stop China from “taking advantage” of America over trade. Trump spoke at an event in West Virginia where he touched on U.S. trading relationships all over the globe.
- “You have to go after the people who aren’t treating you right.”
- “I think we’re going to have a fantastic relationship long term with China but we have to get this straightened out, we have to have some balance.”
- The European Union is “very solidly against us in terms of trade, it’s very unfair. We can’t even do business. They send everything over here, they don’t want to take our product. We can’t let that happen.”
- “We’re working very hard on Nafta with Mexico and Canada. We’ll have something, I think, fairly soon.” He then added, “There’s no rush. We’ll get it done right and we’ll terminate it.”
Airbus Could Use U.S.-China Spat Against Boeing (2:28 p.m.)
Boeing Co.’s European rival, Airbus SE, would use a trade dispute between the U.S. and China to try and win orders for airplanes, Roger Dow, president of the U.S. Travel Association, said in an interview at Bloomberg offices in Washington on Thursday.
China announced plans this week to impose 25 percent retaliatory tariffs on $50 billion worth of imports from the U.S. if the Trump administration slaps duties on a similar value of Chinese merchandise.
China’s list of targets included an older model of Boeing 737 jetliners while excluding its best-selling 737 Max 8 plane. The targeting of Boeing -- the largest U.S. industrial company and exporter -- raised concerns about the rippling impact on the U.S. economy from an escalating trade spat.
“It’s either Boeing or Airbus, there’s only two games,” said Dow. “And you’ve got to be sure that Airbus is going to be using this against Boeing every possible way they can to say, “Buy from us versus them.”’
EU, Japan Join U.S. WTO Case Over China Tech (1:33 p.m.)
The European Union and Japan have asked to join the Trump administration’s World Trade Organization case over China’s alleged discriminatory technology licensing. The EU and Japan said they had a “substantial trade interest” in the U.S.-China dispute proceeding.
The Trump administration announced the launch of the the WTO case last week as part of its response to China’s alleged theft of U.S. intellectual property. U.S. President Trump signed an order last week proposing tariffs on about $50 billion worth of Chinese goods. China this week said it would strike back by imposing tariffs on the same amount of U.S. imports.
In the request, the EU said it exports high-tech products to China valued at 30 billion euros ($37 billion) and the aggregate value of EU direct investments into China total 180 billion euros. Japan said it is “one of the largest stakeholders in technology transfer to China” and Japanese nationals hold a significant amount of patent rights in China.
Kudlow Seeks ‘Coalition of the Willing’ for China (9:50 a.m.)
The U.S. wants to rally pro-market allies to push back against China’s unfair trade practices, a senior White House adviser said.
“The damage of our economy comes from China’s restrictive practices. Blame China. They’ve been doing this for decades. Don’t blame Trump,” Larry Kudlow, head of the White House’s National Economic Council, told reporters in Washington.
In threatening to punish China for its abuse of intellectual property, Trump is “doing what everyone in the world has said we should do,” said Kudlow, adding that the administration will have more to say about its efforts to recruit other major economies to support the U.S. position.
“I call it a trade coalition of the willing. I think everybody in the world knows that China has not played by the rules for many years,” he said.
For a second straight day, Kudlow sought to reassure investors about Trump’s plan to impose tariffs on $50 billion worth of Chinese products. The White House hasn’t announced a date for tariffs to take effect, and is giving the public about 60 days to offer feedback.
Kudlow emphasized that the tariffs haven’t been enacted, and the administration will consult with a range of parties, including U.S. lawmakers, the agriculture industry and the Chinese government itself. China said Tuesday it prefers to negotiate a solution, but isn’t afraid to retaliate if the U.S. duties take effect.
“It’s nothing around the corner. There’s going to be big discussion about it,” Kudlow said.
Here’s What Already Happened This Week:
- China said Wednesday it would levy a 25 percent tariff on about $50 billion of U.S. imports including soybeans, automobiles, chemicals and aircraft. That was in response to proposed U.S. tariffs on Chinese imports announced the previous day.
- The Trump administration softened a key Nafta demand for more North American content in car manufacturing, according to people familiar with the negotiations.
What to Watch:
- April 13-14: Nafta partners may announce a preliminary deal on the trade pact at a summit in Peru.
- May 1: U.S. steel and aluminum tariffs relief lapses for Canada, Mexico, the European Union, Brazil and Argentina, unless they’ve already agreed to a permanent solution. Trump could also renew the temporary exemptions for talks to continue.
- May 15: The U.S. will hold a public hearing in Washington on its proposed tariffs against China.
- Late May: The Treasury Department must hand over proposed measures to address China’s investment practices involving the acquisition of sensitive technologies.
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