Bloomberg reported recently that while President Donald Trump has been musing about another trade confrontation with China. Trump says he “is not actually looking to talk to Chinese President Xi Jinping right now, although he had mused about “eliminating” the largest trading relationship in the world, with tensions high over the coronavirus outbreak, Bloomberg said.
Asked in a recent TV interview about whether he had spoken to Xi recently, President Trump said that they have “a very good relationship” but “right now, I don’t want to speak to him. I don’t want to speak to him.”
Unprompted, he offered that “we could cut off the whole relationship. If we did, what would happen? You’d save $500 billion,” he said – a reference what Bloomberg called “inaccurate” concerning the volume of trade between the countries.
President Trump has sought for some time to blame China for the coronavirus pandemic as public confidence in his handling of the U.S. outbreak had sunk, Bloomberg said. The president and some of his allies have discussed somehow punishing Beijing for the outbreak, though any economic measures risk harm to the U.S., which is now in recession. “Cheap labor turned out to be very expensive,” the president said of China.
Trump also commented that he’s examining Chinese companies that trade on the NYSE and Nasdaq stock exchanges but which “don’t follow U.S. accounting rules. We are looking at that very strongly,” he said, but cautioned that it could backfire.
“Let’s say we do that, right,” Trump said. “So, what are they going to do? They’re going to move their listing to London or someplace else.”
Trump also rejected renegotiating the “Phase One” trade deal he signed with Beijing in January. “We’re not going to renegotiate,” he noted and said the virus “was never even a subject” when the deal was signed. The president’s re-election opponent, former Vice President Joe Biden, has sought to turn the trade deal -- one of Trump’s signature first-term accomplishments -- into a liability by alleging the president had been focused on the agreement to the exclusion of the growing coronavirus outbreak.
The Chinese Ministry of Foreign Affairs said late last week that continuing to develop ties was a core interest for both China and the U.S.
“The stable development of relations between China and the United States is in the fundamental interests of the people of two countries and is also conducive to world peace and stability,” ministry spokesman Zhao Lijian told a media briefing in Beijing. “At present, China and the United States should continue to strengthen anti-epidemic cooperation, overcome the epidemic as soon as possible, cure patients and resume production and life.”
While Chinese purchases of U.S. agricultural goods have recently picked up, the Global Times, a Communist Party publication, reported earlier this month that Beijing was weighing voiding or renegotiating the deal. The publication said that officials in the Chinese government were angered by U.S. criticism of China’s handling of the coronavirus pandemic.
The president also said last week that while he still suspects the outbreak may be connected to a virology lab in Wuhan, China, it “was unlikely the Chinese deliberately unleashed the pathogen. I think more likely it got out of control,” he said.
However, the president agreed with a TV host that China is trying to steal intellectual property and beat the U.S. to a coronavirus vaccine. “We can stop them, they’re going to try doing it,” he said. “I mean, you can stop doing business with them, that’s one thing.”
Trump also threatened to replace board members of the Thrift Savings Plan, a retirement plan for federal workers, if they don’t follow through with a plan to defer shifting some of its investments into the stocks of Chinese companies.
The savings plan was scheduled to transfer roughly $50 billion of its international fund to mirror an MSCI All Country World Index, which captures emerging markets including China. The Board was under pressure from the Trump administration and some lawmakers in Congress to delay the move.
The board said Wednesday it would delay the move “due to a meaningfully different economic environment related in large part to the impact of the global COVID-19 pandemic” and the nomination of three new board members.
“You know it’s run by the Obama appointments, right?” Trump said of the savings plan. “We’re going to find out whether or not they’re going to do it very soon, and if they’re not, we’re going to replace them very quickly.”
So, we will see. Clearly, some members of the administration would like to ramp up the “get tough” policies toward China for a number of reasons?although the evidence linking any single nation to the COVID-19 outbreak has not attracted strong support from other trading partners. National policies regarding trade are continuing to be an extremely sensitive U.S. issue, debates that should be watched closely as they intensify, Washington insider believes.
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