U.S. President Donald Trump listens during a meeting with Moon Jae-in, South Korea’s president, not pictured, in the Oval Office of the White House in Washington, D.C., U.S. (Photographer: Oliver Contreras/Pool via Bloomberg)

Trump Says `Not Really' Pleased With China Trade Talks So Far

(Bloomberg) -- President Donald Trump said he is “not really” pleased with the results of U.S. trade talks with China so far as some of his loyalists attacked his retreat from threatened tariffs as a betrayal of his populist campaign promises.

Trump expressed his misgivings on the negotiations to reporters during an Oval Office meeting Tuesday with South Korean President Moon Jae-in. Asked whether he was pleased with the talks, Trump responded, “No, not really,” though he added, “They’re a start.”

The Trump administration decided to hold off on imposing tariffs on billions of dollars worth of Chinese goods because of White House discord over trade strategy and concern about harming negotiations with North Korea, according to people briefed on the administration’s deliberations.

The agreement at least delays a trade war between the world’s two largest economies, a prospect that has rattled financial markets for months. But many U.S. concerns about China’s economic practices remain unresolved: its acquisition of American technologies; the country’s plans to subsidize the growth of advanced domestic industries such as artificial intelligence and clean energy; and U.S. companies’ access to China’s markets.

Former White House adviser Steve Bannon blamed Mnuchin. Trump “changed the dynamic regarding China but in one weekend Secretary Mnuchin has given it away,” he said in an interview. “Mnuchin has completely misread the geopolitical, military, and historical precedents, and what President Trump had done was finally put the Chinese on their back heels.”

Some White House officials blame poor coordination among the warring factions in Trump’s economic team for the retreat, according to several people briefed on the matter. Within the administration, divisions are raw between free-trade supporters such as Mnuchin and White House economic adviser Larry Kudlow and China hawks led by White House trade adviser Peter Navarro.

During a trip to Beijing earlier this month, Navarro and Mnuchin argued about the U.S. negotiating position, and Navarro wasn’t deeply involved last week in negotiations with a Chinese delegation in Washington.

The divisions are apparent in Trump’s public actions. In April, the Commerce Department cut off Chinese telecommunications company ZTE Corp. from its American suppliers in response to what Commerce Secretary Wilbur Ross called “egregious” violations of U.S. sanctions against doing business in Iran and North Korea.

Trump reversed course via tweet a week ago, declaring that it would cost “too many jobs in China.”

Trump said Tuesday that he ordered a review of the penalty as “a favor” to Xi and said the penalties against ZTE also were “really hurting American companies.” He added he would “envision” a revised penalty for the company including a requirement that it appoint a new board of directors and a “very large fine” of perhaps $1.3 billion.

Asked about the company, he said there is no deal yet with China -- but it was not clear whether he was speaking specifically about ZTE or about broader trade disputes.

Mnuchin said earlier Tuesday that the U.S. didn’t mean to “put ZTE out of business” by penalizing the company for violating U.S. sanctions.

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