WASHINGTON — President Donald Trump taunted China on Wednesday morning, saying in a pair of tweets that Chinese negotiators were attempting to drag out trade negotiations until a “very weak” Democrat was back in the White House and insisting he would be happy to keep tariffs on Chinese exports rather than make a deal.
Trump’s tweets came as Chinese negotiators are headed to the United States to try to salvage a trade agreement that has fallen apart, suggesting a long road may be ahead. His comments are likely to further inflame tensions as Chinese officials, including Vice Premier Liu He, one of China’s top economic officials and a close confidant of the country’s leader, Xi Jinping, join talks in Washington on Thursday.
A quick resolution now seems unlikely. Significant gaps remain between the two sides, and Trump suggested he is ready to impose higher tariffs on $200 billion worth of Chinese goods Friday morning.
“The reason for the China pullback & attempted renegotiation of the Trade Deal is the sincere HOPE that they will be able to ‘negotiate’ with Joe Biden or one of the very weak Democrats, and thereby continue to rip-off the United States (($500 Billion a year)) for years to come,” Trump said on Twitter on Wednesday morning.
“Guess what, that’s not going to happen! China has just informed us that they (Vice-Premier) are now coming to the U.S. to make a deal. We’ll see, but I am very happy with over $100 Billion a year in Tariffs filling U.S. coffers … great for U.S., not good for China!” the president added.
On Wednesday morning, the U.S. Trade Representative filed a public notice saying that tariffs on roughly $200 billion of Chinese products would increase to 25% from 10% on May 10 “in light of the lack of progress in the additional rounds of negotiations since March 2019.”
The Chinese Commerce Ministry issued a statement in response suggesting it was ready to retaliate should the tariff rate increase.
“The escalation of trade friction is not in the interests of the people of the two countries and the people of the world. The Chinese side deeply regrets that if the U.S. tariff measures are implemented, China will have to take necessary countermeasures,” according to the ministry.
Steady progress toward a trade deal blew up last weekend when China called for substantial changes to the negotiating text and Trump responded by threatening to raise existing tariffs and impose new ones on an additional $325 billion worth of products.
“Since the meeting on December 1, the United States and China have engaged in additional rounds of negotiation on these issues, including meetings in March, April, and May of 2019,” the notice read. “In the most recent negotiations, China has chosen to retreat from specific commitments agreed to in earlier rounds.”
The atmosphere surrounding the trade talks has shifted dramatically since a week ago, when observers in both countries thought a deal might be imminent. Instead, hard-liners within China recently pushed back on concessions that its negotiators had offered to the United States, a development that Trump’s top advisers said moved the talks “backwards.”
Trump’s advisers were surprised by developments during talks last week in Beijing and in an exchange of documents over this past weekend, when Chinese negotiators called for changes in the language of all seven chapters of the 150-page draft agreement, people familiar with the negotiations said.
The Chinese requests covered everything from agreements not to obtain American intellectual property to limiting Chinese subsidies and currency manipulation. In particular, the Chinese objected to how Trump’s advisers wanted to codify the deal, the people said. The administration wanted the text of the agreement to specify that some of the changes that China had promised would be made in Chinese law. But Chinese negotiators insisted that the changes would be carried out through regulatory and administrative actions by the Chinese government, and not cemented in place through legislation in the National People’s Congress.
While Liu was given the authority to negotiate the terms of the agreement with the United States, much of what was agreed to was still in relatively abstract terms, according to another person familiar with the talks. When the draft agreement was brought back to a wider group of Chinese officials, it was met with concerns that certain provisions agreed to in principle were in conflict with Chinese laws and would require legal changes that would be complicated or unacceptable to enact, this person said.
The retreat angered Trump’s advisers, including Robert Lighthizer, the U.S. trade representative, prompting Trump to double down on his tariff threat.
“There were communications over the weekend that made clear to us that it looked like we were going substantially backwards, and that’s what led to us updating the president,” Steven Mnuchin, the Treasury secretary, said Monday.
China has pushed back on that assertion. A foreign ministry spokesman said in a briefing Wednesday that differences would naturally arise in the course of a negotiation and that Beijing was negotiating in good faith.
It remains to be seen whether both sides can walk back the tensions and bridge the significant remaining differences. Trump administration officials including Lighthizer and Peter Navarro, a top trade adviser, remain deeply skeptical of China’s record of upholding its past commitments. Senior Trump administration advisers have been circulating a five-page, single-spaced document detailing the economic promises that China has made to various U.S. presidents and then broken.
Lighthizer is leading preparations before the next round of negotiations and, according to an administration official, the president is unfazed by the volatility in the stock market this week and wants to show China that he is serious about his threat to ratchet up tariffs.
Longtime China critics in the United States have pushed the president to hold out against what they see as China’s tough negotiating style.
“In my study of Chinese negotiating tactics, in almost every case, they believe the end game is where they can score the most points,” Michael Pillsbury, a China scholar at the Hudson Institute and an adviser on China to the White House. “They’ll be totally prepared for this final phase.”
The rising acrimony and mistrust between Washington and Beijing has extended beyond trade in recent days to include geopolitical issues as well.
The administration itself has been divided on how to interpret North Korea’s decision Saturday to fire rockets and guided weapons off its east coast. Some in the administration interpreted the launches as evidence of North Korean truculence toward its main sponsor, China, which was celebrating that day the centennial anniversary of a famous uprising against Western colonialism.
But others in the administration believed that China must have approved the weapons tests in advance and saw them as a sign that Beijing wanted to force the United States to accept the revisions it had just presented to the two sides’ draft trade agreement. For some advisers, the North Korean tests further soured attitudes toward China at a crucial moment in the trade negotiations.
The retrenchment in the talks has come as a surprise to businesses and investors, who believed that the two countries were headed toward a deal that would open Chinese markets to American business, require China to protect intellectual property and result in large purchases of U.S. products. Markets, which fell Tuesday, recovered ground Wednesday as Trump confirmed the Chinese delegation was headed to the United States.