President Donald Trump said Friday he has not agreed to roll back tariffs on Chinese imports, dampening recent optimism for a major de-escalation in the US-China trade war.
Amid a steady stream of conflicting reports, Trump’s remarks appeared to push back against Beijing’s claims that the two sides had agreed to remove tariffs in stages as part of a partial deal announced last month.
Hopes for progress in defusing trade tensions have driven global stocks higher this month, since an agreement would remove a major source of uncertainty in the world economy that is undercutting growth.
But Trump again portrayed the dispute as a boon for the United States despite the tariffs paid by American companies and consumers.
‘They would like to have a rollback. I haven’t agreed to anything,’ Trump told reporters at the White House.
‘China would like to get somewhat of a rollback, not a complete rollback, because they know I won’t do it.’
Beijing, however, said this week the two sides had already agreed to mutual tariff reductions.
Commerce Ministry spokesman Gao Feng announced Thursday that negotiators ‘agreed to roll back the additional tariffs in stages, as progress is made towards a (final) agreement.’
The United States and China have imposed steep tariffs on hundreds of billions of dollars in two-way trade, and another round of US duties are set to hit on December 15 on $160 billion in Chinese goods.
Trump again said Beijing is eager for a deal because their economy is hurting, although observers say China has more leverage as the US president prepares to compete for reelection.
Economic data show the conflict has hit US businesses and the uncertainty created by the dispute between the economic powers is undermining global growth.
‘Frankly, they want to make a deal a lot more than I do,’ Trump said, adding that the initial agreement will be signed ‘in our country,’ possibly in Iowa.
Investors worldwide have been cheered in recent days by reports quoting sources in Washington and Beijing saying duties already imposed could be removed in a proportional way.
But markets also have been buffeted by conflicting comments from White House officials, including China hardliner Peter Navarro, who earlier Friday cast doubt on any plans to remove punitive duties.
‘What is on the table is tariffs coming in December, December 15,’ Peter Navarro told NPR radio. ‘We would be willing I think — it’s up to the president — to postpone those tariffs.’
‘But not roll back any existing tariffs. That’s the fine distinction here.’
White House economic aide Larry Kudlow was less categorical, telling Bloomberg on Thursday that if the sides reach a phase one trade deal, ‘there are going to be tariff agreements and concessions.’
China expert Derek Scissors, of the conservative American Enterprise Institute in Washington, said Beijing is playing one faction against the other to get a better deal.
‘There is a group within the administration that essentially wants to unconditionally roll back tariffs. This gives the Chinese an opportunity to get more without offering more,’ Scissors told AFP.
‘On the economic side, phase 1 is not a big win for the US no matter what. If we roll back tariffs, it’s a big win for China.’
The International Monetary Fund has cut its global growth forecast and warned that implementing all the announced tariffs would cut $700 billion out of the world economy next year.
Greg Daco of Oxford Economics warned against excessive optimism since the agreement between Washington and Beijing is far from final but said rolling back tariffs could boost the US economy.
‘However, the benefits from easing trade tensions could be much smaller if the rollback appeared temporary as uncertainty would keep businesses cautious,’ Daco said in a research note.