Published: Thu, December 06, 2018
Worldwide | By Isabel Fisher

Donald Trump Demands 'REAL DEAL' with China Despite Shaken Stock Market

Donald Trump Demands 'REAL DEAL' with China Despite Shaken Stock Market

President Donald Trump, right, has dinner with China's President Xi Jinping, left and members of their delegation at the end of the G20 Leaders' Summit in Buenos Aires, Argentina, Dec. 01, 2018.

Many economists have expressed skepticism that very much could be achieved to bridge the vast disagreements between the two countries in just 90 days.

Trump had threatened to tax imported cars, trucks and auto parts, potentially targeting imports that previous year totaled $335 billion, and the European Union had warned that it would retaliate with tariffs on products worth $20 billion if Trump put duties on cars and auto parts from Europe.

Trump warned that although he and Xi want to get to an agreement "remember, I am a Tariff Man".

According to details released by the White House, Trump agreed to postpone a planned January 1 escalation of tariffs on Chinese goods for 90 days, while Xi agreed to buy more American agricultural goods in the meantime.

China has said that Beijing and Washington will push forward with trade negotiations in the next 90 days and it is confident that an agreement can be reached but doubts remain over whether the two sides can resolve their deep differences.

Team Trump said China would agree to purchase a not yet agreed upon, but very substantial, amount of farm, energy, industrial and other products from the US. The company said it wants to ramp up production in North America and is considering - although hasn't yet decided - whether to set up a second plant in the make power trains. But Kudlow acknowledged on Tuesday that so far they haven't seen any evidence of concrete steps being taken. In fact, the only definite thing to seemingly come out of the summit is the United States vowing to hold off on raising threatened tariffs for 90 days. Failure would raise the spectre of fresh USA tariff action and potential Chinese retaliation as early as March. The statement did not mention whether Trump discussed tariffs with the automakers.

Mr. Trump has used tariffs to force Beijing to the negotiating table over its long-standing trade abuses, including tariffs and other trade barriers, theft of intellectual property and forced transfer of technology from US companies doing business in China.

IP theft is a core battleground in the trade war. They jumped Monday in response to Saturday's truce, but then fell again Tuesday morning.

"Officials now face the hard task of fleshing out a deal that is acceptable to the Chinese but also involves significant enough concessions not to be torpedoed by the China hawks in the Trump administration", Capital Economics said in a note this week.

President Donald Trump threatened Tuesday to slap more tariffs on China if efforts to strike a trade deal with Beijing crumble.

"We...thought Charleston could build cars for China", Volvo's global CEO Hakan Samuelsson told USA Today during an interview at the Los Angeles Auto Show last Wednesday. It also would begin buying products from USA farmers "immediately".

But the United States leader kept up the threats as he warned that he was ready to make China "pay for the privilege" of selling in the U.S. market if the negotiations fail.

But Kudlow said the ultimate amount will depend on market prices and the health of China's economy. "I do think it means something, I do".

But with tariffs at 40 percent, analysts have measured a sharp slowdown in demand for American made vehicles. Or it might illustrate China's weak commitment to the deal.

German automakers said after the meeting they told Trump they planned to boost US investments, but warned they would be unable to do so if the administration imposed new tariffs. That left some United States farmers cautiously hopeful Monday. "If this suspension of tariff increases leads to a longer-term agreement, it will be extremely positive for the soy industry".

Daimler President Dieter Zetsche said the U.S. At the same time, the federation noted that the truce prolongs the uncertainty around trading with China.

Jonathan Gold, an executive at the federation, said most retailers had already ordered goods for the first three months of the year, so the 90-day delay in the tariff hikes won't affect them.

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