Washington: US President Donald Trump on Tuesday opened the door to more lengthy talks with China to resolve the damaging trade dispute beyond the announced 90-day timeline.
And while Trump has promised big results from the negotiations, he also threatened more tariffs if the sides cannot reach an agreement, which would add to the economic pain already inflicted on American consumers and companies.
Dubbing himself “Tariff Man,” Trump said on Twitter he would not hesitate to make China “pay for the privilege” of selling in the US market.
Trump repeated his frequent claim that the United States was bringing in billions of dollars in tariffs on foreign goods to “MAKE AMERICA RICH AGAIN.” But it is US consumers and businesses who pay for tariffs in the form of higher costs and prices.
The change in tone and the increased confusion over what was achieved at the meeting contributed to a sharp decline in the US stock market, which just after midday dropped more than two percent, losing 600 points.
Schwab said in a commentary that the market was concerned that “uncertainty appears to be resurfacing on whether a permanent deal can be reached.”
In a series of tweets on Tuesday, Trump held out the possibility the talks could extend beyond March 1.
The clock started ticking on December 1, when Trump met in Buenos Aires with China’s leader Xi Jinping and agreed to work towards an agreement to roll back the exchange of tariffs on hundreds of billions of dollars in two-way trade.
“The negotiations with China have already started. Unless extended, they will end 90 days from the date of our wonderful and very warm dinner with President Xi in Argentina,” Trump tweeted.
– ‘I am Tariff Man’ –
After the meeting, the United States agreed to hold off on Trump’s plan to raise the tariffs on $200 billion in Chinese imports to 25 percent beginning January 1, leaving them at the current 10 percent rate.
In return, Washington said China would purchase “very substantial” amounts of US agricultural, energy, industrial and other products.
Trump also said China would “reduce and remove” tariffs of 40 percent on cars, though Beijing has yet to confirm the move.
While US officials said the agreement will include specific timelines and policy reforms, the comments from Trump and others have not provided much clarity on the outcome of Saturday’s highly-anticipated meeting.
And the tone of Trump’s latest tweets show an apparent shift from 24 hours earlier, when he was unreservedly triumphant, saying relations with China had taken a “BIG leap forward.”
On Tuesday, he said US Trade Representative Robert Lighthizer would lead the talks to see “whether or not a REAL deal with China is actually possible.”
And while Trump said he would “happily sign” a “fair deal” that addresses US concerns, he added a warning: “remember, I am a Tariff Man. When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so.”
American farmers have been hit hard by China’s retaliation on US farm goods, especially soybean exports, which have plummeted due to a 25 percent tariff imposed by Beijing.
Trump said China “is supposed to start buying Agricultural product and more immediately.”
But there remains no timetable or agenda for the formal talks, and the uncertainty has dampened enthusiasm on US stock markets which retreated on Tuesday after an initial bout of optimism led to modest gains on Monday.