Trump, Vance open door to China deal as trade spat drags on
US remarks suggest sustained pressure on China to reverse its most recent trade moves
[WASHINGTON] US President Donald Trump’s administration signalled openness on Sunday (Oct 12) to a deal with China to quell fresh trade tensions while also warning that recent export controls announced by Beijing were a major barrier to talks.
Vice-President JD Vance called on Beijing to “choose the path of reason” in the latest spiralling trade fight between the world’s two leading economies, claiming that Trump has more leverage if the fight drags on.
Trump later posted a statement that hinted at a possible off-ramp for Chinese President Xi Jinping while issuing a veiled threat that a full trade war would wound China.
“Don’t worry about China, it will all be fine! Highly respected President Xi just had a bad moment. He doesn’t want Depression for his country, and neither do I. The USA wants to help China, not hurt it!!!” he wrote on Truth Social.
The remarks from Trump and Vance suggest that the US wants to keep up the pressure on China to reverse its most recent trade moves, while trying to reassure spooked markets that a tit-for-tat escalation is not inevitable.
Stocks, oil and crypto were hammered on Friday by the flare-up, which was stoked by a social media post from Trump threatening the US would respond to China’s imposition of export curbs on rare earths and other trade measures. Vance cast it as an ongoing negotiation.
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“It’s going to be a delicate dance, and a lot of it is going to depend on how the Chinese respond,” Vance said on Fox News’s Sunday Morning Futures. “If they respond in a highly aggressive manner, I guarantee you, the president of the United States has far more cards than the People’s Republic of China. If, however, they are willing to be reasonable,” he said, then the US would, too.
China’s Ministry of Commerce said earlier Sunday that the US should stop threatening it with higher tariffs and urged further negotiations to resolve outstanding trade issues.
Tensions flared over the past week when China announced new export controls and other measures, though some don’t take effect until November, or may not be widely enforced.
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“I think it’s become very clear to everybody that this power grab by the Chinese won’t be tolerated,” US Trade Representative Jamieson Greer said on Fox News’s The Sunday Briefing.
An apparently furious Trump announced on Friday that he would add tariffs of 100 per cent on Chinese goods and restrict certain US software exports, beginning Nov 1, while also signalling he might halt shipments of aircraft parts. But Trump also said that he picked a November date for negotiations.
“Let’s see what happens,” Trump told reporters on Sunday on Air Force One as he headed to the Middle East. “You know for me, you know what Nov 1 is? It’s an eternity. Nov 1 is an eternity for me. For somebody else, is right around the corner. For me, when I hear Nov 1, it’s an eternity.”
Greer pointed to that deadline as a reason for hope that the market turmoil will settle this week.
“I think that is a normal reaction for the markets to have some concern,” Greer said. “That being said, these measures aren’t in place yet. It’s scheduled for Nov 1. So I think we will see the markets calm this coming week, as they see things settle out, hopefully.”
Vance, who said he had spoken with Trump Saturday and Sunday, said that the president “appreciates the friendship that he’s developed with Xi”, but added, “We have a lot of leverage. And my hope, and I know the president’s hope, is that we don’t have to use that leverage.”
He added that the good relationship is threatened “if the Chinese go down this pathway of cutting off the entire world from access to some of the goods that they produce.”
Greer on Sunday cited wording in the Chinese Commerce Ministry statement that said export controls are not the same as a ban on exports.
“Clearly, the Chinese have realised that they have wildly overstepped the bounds of what’s acceptable,” he said.
The two superpowers engaged in a spiralling trade fight this spring, ratcheting up tariffs to at least 125 per cent on each side, before striking a deal to retreat to current levels, Chinese levies of 10 per cent on US goods, and a combined US levy of 30 per cent on imports from China, on top of preexisting tariffs.
“We are going to find out a lot in the weeks to come about whether China wants to start a trade war with us, or whether they actually want to be reasonable. I hope they choose the path of reason,” Vance said. BLOOMBERG
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