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Trump ready to slap new tariffs on China after G20 meeting

Kitco News

WASHINGTON/BEIJING (Reuters) - U.S. President Donald Trump said on Monday he was ready to impose another round of punitive tariffs on Chinese imports if he does not reach a trade deal with China’s president at a G20 summit later this month.

Since two days of trade talks last month in Washington ended in a stalemate, Trump has repeatedly said he expected to meet Chinese President Xi Jinping at the June 28-29 summit in Osaka, Japan. China has not confirmed any such meeting.

Trump said last week he would decide after the meeting of the leaders of the world’s largest economies whether to carry out a treat to slap tariffs on at least $300 billion in Chinese goods.

In an interview with CNBC on Monday, Trump said he still thought Xi would attend the summit. When asked if a fresh round of U.S. tariffs would go into effect if the Chinese leader was not at the meeting, Trump said, “Yes. It would.”

“If we don’t make a deal, you’ll see a tariff increase,” Trump told CNBC. He added that he has a “great relationship” with Xi and said Beijing wanted to make a deal with the United States.

China’s foreign ministry said on Monday that China is open to more trade talks with Washington but has nothing to announce about a possible meeting.

Trade tensions between Washington and Beijing rose sharply in May after the Trump administration accused China of having reneged on promises to make structural economic changes during months of trade talks.

The United States is seeking sweeping changes to China’s trade and economic policies, including an end to forced technology transfers and theft of U.S. trade secrets. Washington also wants curbs on subsidies for Chinese state-owned enterprises and better access for U.S. firms in Chinese markets.

On May 10, Trump slapped higher tariffs of up to 25% on $200 billion of Chinese goods and then took steps to levy duties on an additional $300 billion in Chinese imports. Beijing retaliated with tariff hikes on a revised list of $60 billion in U.S. goods.

The U.S. government also angered China by putting Huawei Technologies Co Ltd on a blacklist that effectively bans U.S. companies from doing business with the Chinese firm, the world’s biggest telecoms equipment maker.

Washington also has put pressure on its allies to shut Huawei out, arguing the company could use its technology to carry out espionage for Beijing. Huawei has repeatedly denied it is controlled by the Chinese government, military or intelligence services.

In his interview with CNBC, Trump said the Huawei dispute could be addressed as part of a trade deal with China.

DEAL WITH MEXICO

The escalating trade war between the world’s two largest economies has unnerved financial markets with worries that it could further disrupt global manufacturing and supply chains and push an already slowing global economy into recession.

China reported on Monday that its exports unexpectedly grew 1.1 percent in May from a year ago despite the higher U.S. tariffs, but imports fell the most in nearly three years. Some analysts suspected Chinese exporters may have rushed out shipments to the United States to avoid a potential new round of U.S. tariffs.

Many U.S. business groups have opposed the tariffs, with companies worried about slowing demand as they pass higher prices along to consumers and manufacturers across a range of products.

Late last month Trump said he would impose tariffs on Mexican goods if Mexico did not agree to take strong steps to curb the flow of mostly Central American migrants crossing the U.S.-Mexico border.

Washington and Mexico City reached a deal on Friday to avert the tariffs, removing, at least for the time being, the prospect that the United States would find itself in trade wars with two of its three largest trading partners.

Global equities rose on Monday and the U.S. dollar gained against a basket of currencies, while the Mexican peso was on track for its biggest gain against the greenback since July 2018.

But Trump, who has embraced protectionism as part of an “America First” agenda, said on Monday the tariffs on Mexico would be reinstated if Mexico’s Congress did not ratify another part of the migration pact.

Reporting by Doina Chiacu and Makini Brice in Washington and Stella Qiu and Tony Munroe in Beijing; Writing by Paul Simao; Editing by Meredith Mazzilli

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