President Donald Trump of the US has signalled his willingness to avoid a trade war with Beijing, telling reporters on Wednesday that a new trade deal was “possible.” He also described his relationship with President Xi Jinping as “a great one,” Bloomberg reports.
Trump didn’t go into any details or offer a timeline. Khoon Goh, head of Asia research at ANZ Banking Group, warned that Trump’s “off the cuff comments” didn’t necessarily hold much weight. “Markets are still getting used to the barrage of social media posts, comments to reporters and interviews that President Trump is giving,” he told Bloomberg.
Trump promised to impose additional tariffs on China, Canada and Mexico shortly after re-entering office, claiming that the countries are flooding the US with the deadly synthetic opioid fentanyl. Beijing has vigorously refuted the suggestion and says that Trump’s accusations are a cover for mere protectionism.
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The US president agreed to hold off on what would have been 25 percent tariff hikes on Canada and Mexico earlier this month, after their leaders agreed to clamp down on their borders (stemming flows of both fentanyl and illegal migrants).
However, new 10 percent tariffs on Chinese imports duly came into effect, and were followed by a counter strike from Beijing in the form of 10 and 15 percent hikes on US crude oil, liquified natural gas and some machinery and vehicles.
Eddie Cheung, senior strategist at Credit Agricole CIB in Hong Kong, told Bloomberg that Trump’s approach to China had so far been “milder than expected.” However, he added that it was “reasonable to assume there will still be bumps on the way towards such a trade deal.”
