by WorldTribune Staff, July 27, 2018
In securing major concessions on trade from the European Union this week, U.S. President Donald Trump cleared the way to make China the primary focus of his goal of “free and fair trade.”
In a July 25 tweet, Trump said: “China is targeting our farmers, who they know I love & respect, as a way of getting me to continue allowing them to take advantage of the U.S. They are being vicious in what will be their failed attempt. We were being nice – until now! China made $517 Billion on us last year.”
An additional $200 billion in tariffs on Chinese goods are set to be enacted by the U.S. in August.
“[The] trade war has probably now turned [to a] 100 percent focus on China,” Stephen Innes, head of Asia-Pacific trading at New York-based foreign exchange company Oanda, said in a note to his clients. “Keeping in mind that the U.S. and the EU continue to share intellectual property grievances against China at the [World Trade Organization].”
After meeting with EU officials at the White House on July 25, Trump announced the EU agreed to increase imports of U.S. soybeans and liquefied natural gas. Both sides agreed to work toward the goal of “zero” tariffs and subsidies on non-auto industrial goods, and to “resolve” recent tariffs that both sides have imposed.
“This was a very big day for free and fair trade,” Trump said.
European Commission President Jean-Claude Juncker said that as long as negotiations are ongoing, “we will hold off on further tariffs and reassess existing tariffs on steel and aluminum.”
The EU’s decision to import more soybeans was a win for American farmers, who have seen prices plummet after China slapped a retaliatory tariff on American goods including soybeans after Trump imposed tariffs on Chinese aluminum and steel.
Beijing has aggressively moved to convince Europe to take its side against the U.S. on trade. But, the EU said it shares the Trump administration’s concerns about Chinese industrial policies, such as its “Made in China 2025”, which seek to transform China into a technological superpower, said Julian Evans-Pritchard, senior China economist at London consultancy Capital Economics, according to a report by the South China Morning Post.
“The Chinese have not fully succeeded in really winning the EU over to their side,” Evans-Pritchard said. “The EU obviously agrees with China that the U.S. shouldn’t be unilaterally taking these tariff measures, so it’s been willing to kind of voice support for China in that respect, but it … hasn’t gone any further.”
Evans-Pritchard told the South China Morning Post that the U.S.-EU agreement will allow Washington to take “a more focused approach” on China, but that it would be difficult to find a resolution to the China-U.S. trade war given the Chinese government’s reluctance to shift its industrial policies.
“Although there have been some signs that both sides might be willing to start talking again, they are still very far apart, whereas the disagreements between the EU and the U.S. are much more narrow in scope,” Evans-Pritchard said. “There’s this general perception [from China] that they cannot really trust U.S. negotiations anyway.”