Just when it seemed a truce on trade was within reach, the U.S. and China appear to have reached a new impasse.
The past week has seen China claim both sides agreed to dial back tariffs in the first phase of a trade deal that has been in the works, Trump refute that agreement, China stand firm in its rollback demand, and Trump threaten to institute more tariffs if the countries couldn’t settle on a path forward for trade relations.
Needless to say, the apparel industry may be no closer to a deal that could minimize some of the uncertainty this melee has caused.
In remarks at the Economic Club of New York Tuesday, President Trump said, “If we don’t make a deal, we’re going to substantially raise those tariffs. They’re going to be raised very substantially.”
The president has been clear about his contentment with the tariffs the U.S. has collected from China thus far, noting that “soon we’ll be up to $100 billion in tariffs,” and perhaps less clear on what the impact has been—or will soon be—on prices for both retailers and consumers, saying, “And you haven’t seen inflation and you haven’t seen, in many cases, price increases.”
China has had a rough year, according to Trump, who surmises that a deal, sooner than later, would be in the country’s best interest.
“They’re having their worst year in more than 57 years, more than half a century. Their supply chains are cracking very badly, and they are dying to make a deal,” the president said. “We’re the ones that are deciding whether or not we want to make a deal. We’re close.”
Speaking for itself, however, China has a bit of a different perspective. The country is holding firm to demands that the U.S. remove tariffs as part of the phase one trade deal they had tentatively reached.
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“That is the important condition for reaching the deal,” the South China Morning Post reported China Ministry of Commerce spokesperson Gao Feng as saying Thursday. “The significance of the phase one deal should reflect the scale of the tariff rollback.”
Provided there’s a basis of “equality and mutual respect,” Gao said China is willing to work with the U.S. to settle on conditions for an initial trade deal.
Beyond the back and forth, there’s been no firm commitment as to a date or destination for signing a deal, but for now, there’s still a deal on the table. Also for now, however, new 15 percent tariffs that would hit apparel on Dec. 15 are still on the table, too.
“A significant phase one trade deal with China could happen. It could happen soon,” Trump said. “But we will only accept a deal if it’s good for the United States and our workers and our great companies, because we’ve been hit very hard.”