President Trump on Thursday cast doubt on the possibility of a breakthrough in trade talks with China, saying he was prepared to hammer China’s economy with tough new economic penalties if Beijing doesn’t offer concessions.
“We are under no pressure to make a deal with China,” Trump wrote on Twitter, trying to dispute reports that he was seeking to cut a deal. “They are under pressure to make a deal with us. Our markets are surging, theirs are collapsing. We will soon be taking Billions in Tariffs & making products at home. If we meet, we meet?”
The Twitter post came after White House officials confirmed that Treasury Secretary Steven Mnuchin had offered a formal invitation to Chinese leaders to restart trade talks, aimed at de-escalating the trade battle between the world’s largest economies.
Trump’s Twitter post is consistent with his recent bravado toward China, but it could make Chinese leaders dubious that Trump will be willing to negotiate a deal. Talks between both countries have already broken down several times, at least once because Trump balked at a deal at the last moment.
On Wednesday, White House officials had seemed optimistic at the potential for new talks.
“Well, it’s just an invitation, as far as I know,” White House National Economic Council Director Larry Kudlow said on Fox Business Network. “There’s some discussions and information that we received that the Chinese Government — the top of the Chinese Government wished to pursue talks.”
Kudlow would not estimate where the discussions might lead, but he said it was a positive sign that they were even occurring.
“I always believe, in most cases, talking is better than not talking, so I regard this as a plus,” Kudlow said.
Chinese Foreign Ministry spokesman Geng Shuang said at a Thursday news conference in Beijing that officials had received the White House’s invitation for talks.
The two sides are working out the details, he said.
“China has always held that an escalation of the trade conflict is not in anyone’s interests,” Geng said.
On Friday morning in Beijing, the front page of the state-backed China Daily read: “US offer for trade talks welcomed.”
Any talks would resume amid doubts over prospects for a diplomatic settlement. The administration remains split between trade hard-liners and officials who are more sensitive to corporations’ fears of lost sales and disrupted supply chains.
“The question is whether anything has changed,” said Jeff Moon, a former U.S. trade negotiator in the Obama administration. “Who’s in charge on the American side and what do they want?”
Robert Holleyman, former deputy U.S. trade representative, said U.S. demands for fundamental changes in China’s state-directed economy would make for difficult talks.
“We are a long way from finding a solution,” said Holleyman, a partner at Crowell & Moring. “And a solution will require some tough choices, especially on the part of China.”
Ultimately, Trump and Chinese President Xi Jinping will likely need to haggle personally over any settlement, he said. The two leaders may meet on the sidelines of the United Nations General Assembly later this month and will likely see each other in November at the G-20 summit in Buenos Aires.
The White House is under enormous pressure from U.S. companies to resolve its differences with China swiftly before either country imposes more tariffs or restrictions that these firms argue could hurt growth and lead to lost American jobs.
Trump has been defiant, saying his rigid approach is necessary to force change in Beijing.
“I’m being strong on China because I have to be,” he said last week.
Trump has accused the Chinese government of ripping off American businesses and workers for years through protectionist trade policies, currency manipulation, and stealing intellectual property.
The U.S. bought $505 billion in goods from China last year, and Trump has already moved to impose tariffs on $50 billion of those goods as a way to try to force concessions from the Chinese government.
He said last week that he has an order ready to impose tariffs on another $200 billion in Chinese goods, and then another order ready that would impose tariffs on every product shipped from China to the United States if Beijing doesn’t agree to U.S. demands.
Trump is demanding that China stop requiring U.S. companies to surrender their trade secrets in return for access to the Chinese market. He also wants a sharp reduction in the $375 billion U.S. trade deficit with China.
Separate rounds of talks between the White House and Chinese leaders have already faltered. Commerce Secretary Wilbur Ross tried to cut a deal with Chinese leaders last year, but it was rejected by Trump at the last moment, leading to the escalation this year.
Another round of talks was jump-started this year by Mnuchin, who traveled to Beijing with Kudlow and several other senior officials to try to cut a deal with China’s vice premier, Liu He. But those talks also broke down.
Trump also said he put off challenging China more directly last year because he needed its assistance during nuclear talks with North Korea, but he has recently accused China of trying to hinder those discussions.
Top White House advisers have largely agreed that changes need to be made to rebalance the U.S.’s economic relationship with China, but they have differed on the tactics. Peter Navarro, one of Trump’s closest trade advisers, has advocated for a more strident approach.
Mnuchin and Kudlow, meanwhile, have pushed for more dialogue, worried about the potential impact on the economy if the existing standoff worsens.
Danielle Paquette in Beijing contributed to this report.