Trump: China wants deal because economy 'going down the tubes'

US President Donald Trump said China wants a trade deal because its economy is weakening.
US President Donald Trump said China wants a trade deal because its economy is weakening.PHOTO: AFP

WASHINGTON (AFP) - A bullish President Donald Trump warned China of an even deeper trade war on Wednesday (June 26) ahead of a Group of 20 (G-20) summit where he will meet President Xi Jinping, saying China's remaining imports are "ripe" for tariffs.

Markets are anxiously watching the Trump-Xi meeting, due Saturday, for a breakthrough in the dispute pitting the world's two largest economies against each other.

Insisting that a strong negotiating hand means he has no need to give way, Trump did not especially seek to calm those nerves.

"China's economy is going down the tubes - they want to make a deal," Trump said in an interview with Fox Business News just hours before taking off for the summit in Osaka, Japan.

Trump has already hit US$200 billion (S$270 billion) of Chinese imports with levies in an effort to force Beijing into intellectual property protection and other reforms of a trading system that Washington says gives China huge unfair advantages.

On Wednesday, the president strongly indicated he was ready to slap tariffs on all remaining Chinese imports - more than US$300 billion worth.

"You have another US$325 billion that I haven't taxed yet - it's ripe for taxing, for putting tariffs on," he told Fox.

According to Trump, it's China that's feeling all the pain.

"What is happening is people are moving out of China. Companies are moving out of China, by the way, some are coming back to the United States because they don't want to pay the tariff," he told Fox Business News.

Trump did say that a previous threat to tax this remaining segment at 25 per cent could be changed to a less harsh 10 per cent.

The two sides said they were close to a deal before talks broke down in May.

"We were about 90 per cent of the way there," Treasury Secretary Steven Mnuchin told CNBC television, saying he was looking forward to the Trump-Xi talks but stressing there would be no "deal for having the sake of a deal."

"I hope the message that we want to hear is that they want to come back to the table," Mnuchin said.

TRUMP ON DIPLOMATIC WARPATH

Trump's aggressive attempt to rewrite the rules with China are part of a wider policy of fixing what he says is a system rigged against the United States.

"Almost all countries in this world take tremendous advantage of the United States. It's unbelievable," he said in the lengthy interview.

 
 
 
 

Casting his eye over the wider landscape, Trump also lashed out at close partners Vietnam, Germany and Japan.

Vietnam is "even worse than China" when it comes to unfair trading practices, he said. Vietnam is the "single worst abuser."

He described Germany - part of the bedrock of the US alliance with western Europe - as "delinquent" for not paying enough to Nato's budget.

"So Germany is paying Russia billions and billions of dollars for energy, okay," he said. "So they are giving Russia billions of dollars yet we are supposed to protect Germany and Germany is delinquent! Okay?"

Trump aired a similar complaint about Japan, Washington's closest ally in Asia, which has been under the protection of a US military umbrella since its defeat in World War II.

"If Japan is attacked, we will fight World War III. We will go in and protect them with our lives and with our treasure," he said.

"But if we're attacked, Japan doesn't have to help us. They can watch it on a Sony television."