Trump confident China will take down trade barriers

US Treasury Secretary Steven Mnuchin said on Sunday there was a risk of a trade war between the United States and China after the countries proposed imposing tariffs on billions of dollars worth of one another's goods, but that he did not expect one.

WASHINGTON • United States President Donald Trump yesterday said he sees an end to the escalating trade dispute with China, after tit-for-tat retaliatory tariffs and threats that rattled markets.

"China will take down its trade barriers because it is the right thing to do," Mr Trump said in a tweet.

"Taxes will become reciprocal and deal will be made on intellectual property. Great future for both countries!"

He added that he and China's President Xi Jinping "will always be friends, no matter what happens with our dispute on trade".

US stocks plunged more than 2 per cent last Friday after Mr Trump warned of tariffs on an additional US$100 billion (S$131.5 billion) worth of Chinese imports, provoking a strong response from Beijing and fanning fears of a full-blown trade war.

Investors were unnerved by the latest broadside from the volatile US President and by China's strident response, which saw Beijing vowing that it would stand firm "until the end at any cost".

Some global investors have, however, taken solace from signals that the Trump administration may be taking a harsh line as a bargaining tactic towards dealmaking with China.

In the wake of Mr Trump's decision last month to impose steep tariffs on steel and aluminium imports, primarily to target China, the US last Tuesday published a list of US$50 billion in Chinese goods to be hit by tariffs over what Washington says is widespread theft of intellectual property and technology.

China retaliated by unveiling planned levies on US$50 billion worth of major US exports, including soya beans, cars and small aircraft. Mr Trump hit back again late last Thursday, instructing trade officials to consider the additional levies on US$100 billion in imports.

So far, only the tariffs on steel and aluminium have taken effect.

US businesses, and farm states most vulnerable to Chinese retaliation, have called for restraint.

Treasury Secretary Steven Mnuchin acknowledged there was a risk of a trade war, but said the intention is to defend US interests and the administration remains willing to negotiate.

AGENCE FRANCE-PRESSE

A version of this article appeared in the print edition of The Straits Times on April 09, 2018, with the headline 'Trump confident China will take down trade barriers'. Print Edition | Subscribe