WASHINGTON/BEIJING • US President Donald Trump said that substantial additional American tariffs would be placed on goods from China if there is no progress on a trade deal after his planned meeting with Chinese President Xi Jinping at the Group of 20 Summit in Japan.
"My Plan B with China is to take in billions and billions of dollars a month and we will do less and less business with them," Mr Trump said on Wednesday during a Fox Business Network interview.
The White House announced that his meeting with Mr Xi would take place at 11.30am local time in Osaka tomorrow.
Mr Trump had said previously that he may decide to raise tariffs on the remaining US$300 billion (S$406 billion) worth of Chinese imports if he does not like what he hears from Mr Xi at this weekend's summit in Osaka.
Asian and US stocks rose yesterday on optimism that Mr Trump and Mr Xi would reach a truce at their highly anticipated meeting.
The United States President's latest remarks added an element of doubt to US Treasury Secretary Steven Mnuchin's comment earlier on Wednesday on CNBC that he is "hopeful" about US-China trade negotiations.
There has been no change to China's conditions for making a trade deal with the US as the two nations' leaders prepare to meet, a Chinese government spokesman said in Beijing yesterday.
If the tariffs on the broader set of goods do go into effect, it could be at a 10 per cent rate rather than 25 per cent, Mr Trump said in the Fox Business interview.
"My Plan B's maybe my Plan A, my Plan B is that if we don't make a deal, I will tariff, and maybe not at 25 per cent, but maybe at 10 per cent," Mr Trump said.
He criticised a range of trading partners in the interview, including Germany and Vietnam, which he called an "abuser" when responding to a question about companies relocating production from China to that South-east Asian country following US-imposed tariffs.
Mr Trump later took a shot at India, saying on Twitter that he would ask Prime Minister Narendra Modi to withdraw an "unacceptable" increase in tariffs on US goods.
It was his first direct response to India's move earlier this month to raise tariffs on a slew of products from walnuts to pulses, which had been delayed since last year as Mr Modi sought talks.
In the Fox Business interview, Mr Trump said he likes China and Mr Xi, but added: "They have taken advantage of us for so long."
"They devalue their currency like a ping-pong ball," he said.
The talks between the leaders of the world's two largest economies mark a critical juncture in their trade war, which has gone on for more than a year, and both sides have plenty to lose if it escalates.
Meanwhile, The Wall Street Journal reported yesterday that Mr Xi planned to present Mr Trump with terms for ending the trade dispute, including removing a ban on the sale of US technology to Huawei, citing Chinese officials with knowledge of the plan.
The report also said China wants the US to lift all punitive tariffs and abandon efforts to get China to promise to buy even more US goods than it previously agreed to do - a reiteration of longstanding demands.
Asked about a news report that a truce in the trade war with the US had been struck after Mr Trump agreed to halt the next round of US tariffs on another US$300 billion of Chinese goods, Chinese Commerce Ministry spokesman Gao Feng said China would welcome action that helped reduce tension.
"We welcome actions that help manage differences and prevent an escalation in frictions," he said, without answering directly whether a deal was expected at the summit.