Geneva: After escalating the trade war with China during the past 72 hours, the US President Donald Trump has softened his stand on Sunday in France saying that he has “second thoughts" as the talks with Beijing are getting “along very well".
The sudden turnaround in President Trump’s stand came hours before leaders of the group of seven industrialized countries- the US, Germany, Japan, France, Britain, Canada, and Italy- began their discussions on the global economy and trade in Biarritz, France. The US President’s relentless trade war rhetoric against China dominated the proceedings, as several G7 countries called for “trade peace," according to reports in the American media.
The French President Emmanuel Macron, who is hosting the 45 annual meeting of the G7 countries, has also invited Prime Minister Narendra Modi as a guest to participate in the G7 deliberations.
Modi and Trump are expected to discuss on the margins of the G7 leaders’ summit on how to enhance bilateral trade between the US and India, including reduction in customs duties on American products, and the US’ proposal to graduate India and China several among other developing countries from availing special and differential treatment. The presence of the US Trade Representative Ambassador Robert Lighthizer in the US team could prompt President Trump to raise several controversial trade issues during his meeting with Modi, analysts say.
Significantly, the ongoing US-China trade war came to the centrestage at the G7 meeting despite the absence of China, which is not a G7 member. The US officials had accused France for fixing the agenda for the G7 meeting on “niche issues," including climate change, in which Washington had taken diametrically opposing positions since the last two years.
According to several media reports, President Trump admitted to having “second thoughts" about ratcheting up the trade war with China. Trump also declared that he had “no plans right now" to press ahead with his earlier order that all American businesses must leave China because of Beijing’s alleged unfair trade practices. “Actually, we are getting along very well with China right now and we are talking," he told reporters.
Later, the US officials tried to downplay President Trump's comments. Larry Kudlow, the White House's economic policy director, told CNN that President Trump actLually meant by "second thoughts" that he ought to have increased the tariffs higher than what he had announced on Friday. "President Trump regrets not raising the tariffs higher," said Stephanie Grisham, the White House press secretary.
On Friday, the US President responded angrily to China’s decision to impose additional tariffs on American goods worth $75 billion. China has maintained that the additional duties of 5% and 10% on almost all the remaining American goods were a “measured" and “balanced" response to the unilateral tariffs imposed by Washington. Beijing’s latest decision to impose additional tariffs on American goods include agriculture products from Ohio and Wisconsin, automobiles in which the US companies export more than $ 6 billion, automobiles, chemicals and textiles among others.
In an angry response to the Chinese decision on Friday, President Trump issued several tweets declaring that he would increase the rate of existing and planned tariffs on Chinese imports by 5% points. The rate of tariffs to be imposed on Chinese products of $300 billion from 1 September and 15 December will be increased to 15%.
The US also announced that it would increase the rate of existing tariffs of 25% on $250 billion Chinese goods to 30% under the US 301 provisions. President Trump had also issued an order that all US companies must vacate because of the alleged unfair trade practices deployed by the Chinese administration.
Following the trade war launched by President Trump last year, China’s exports of around $550 billion to the US are now placed under the dragnet of unilateral crowbar tariffs. The latest round of additional tariffs on Chinese products “could impact everything from the craft bear to the musical instruments," according to a CNBC report on Sunday.
Beijing hit back at the US’ decision on Sunday warning Washington that it will have to “bear all the consequences" arising from its “unilateral and bullying acts of trade protectionism and extreme pressure." “China strongly urges the United States not to misjudge the situation, or underestimate the determination of the Chinese people. It must immediately stop its erroneous practices, or bear all the consequences," said a spokesperson of the China’s ministry of commerce on Sunday.
Against this backdrop, President Trump was asked on Sunday whether he is rethinking about his decision to escalate tariffs against China. “Yeah, sure, Why not?", he told reporters, saying that he has “second thoughts about everything." He went on to accuse China for adopting an “outrageous" approach.