President Trump on Wednesday said he had no plans to quickly remove tariffs against Chinese-imported goods even if a broad trade agreement is reached, adding that he would need more time to determine if leaders in Beijing would comply with new rules.
“We’re talking about leaving them for a substantial period of time, because we have to make sure that if we do the deal with China, that China lives by the deal,” Trump told reporters. “Because they’ve had a lot of problems living by certain deals.”
His comments came as talks between the two countries have reached a critical stage. They raise the prospect that the tariffs could remain in place for years, as it could take a long time to determine whether China is complying with new rules.
Some White House officials had hoped that Trump and Chinese leader Xi Jinping would be able to meet and ratify a sweeping new trade deal later this month.
But negotiations have bogged down amid a dispute over what would happen if China did not abide by the terms of any new deal, as well as Trump’s demand for far-reaching changes in China’s state-led economic system.
U.S. Trade Representative Robert E. Lighthizer and Treasury Secretary Steven Mnuchin plan to fly to China next week for further talks, though it’s unclear whether Chinese officials have hardened their resistance to recent White House demands.
The Trump administration last year imposed tariffs on $250 billion in Chinese goods, such as machinery, carpets, cosmetics and certain equipment. The taxes consist of a 10 percent tariff on $200 billion in goods and a 25 percent tariff on $50 billion in goods.
Trump has argued that China for years has abused U.S. companies and consumers by ripping off intellectual property, unfairly subsidizing Chinese businesses, and manipulating their currency in a way that makes it harder for U.S. firms to compete. He threatened to raise the rate from 10 percent to 25 percent and expand the tariffs even more broadly if China didn’t agree to negotiate major changes.
During a meeting in November, Xi and Trump agreed to start formal talks, and Trump said he would suspend any decision on raising the tariffs until March 1. As talks continued and it appeared progress was being made, Trump said he would defer the decision about raising tariffs indefinitely.
In February, it appeared as if the White House and Chinese leaders were within striking distance of completing a deal, and Mnuchin told reporters that a major agreement had been reached on currency manipulation. But in the days after those remarks, other White House officials said a deal had remained elusive.
And it has always remained unclear what would happen to the existing tariffs if a deal were reached. Trump’s comments Wednesday were the first time he said he had no plans to lift the tariffs immediately following an agreement, a pronouncement that could anger Chinese leaders.
White House officials have said the tariffs were necessary, in part, to force Chinese officials to the negotiating table, but Trump has lauded tariffs in the past and refused to remove them even when many thought he would.
Chinese officials have pushed to have the tariffs removed as part of the talks, but White House officials have so far resisted. Still, Trump has said the final agreement will have to be sorted out between himself and Xi, and it’s possible he would leave the tariffs on the table until that point. Or, as he said on Wednesday, he could decide to keep the tariffs in place indefinitely, challenging Chinese leaders to walk away at the last moment.
Senate Majority Leader Charles E. Schumer (D-N.Y.) has prodded Trump to take a hard line with China and not be afraid to terminate talks if China doesn’t offer major concessions, so the White House does have some bipartisan backing for Trump’s hardball approach. Still, investors around the world have been anxious for the trade stalemate to resolve itself, and it’s unclear what a prolonged impasse might mean for growth in both countries.
As part of his push to force Canada and Mexico to renegotiate the North American Free Trade Agreement, Trump imposed tariffs on steel and aluminum imports. Even after officials in Canada and Mexico agreed to rework that trade deal, Trump kept the steel and aluminum tariffs in place, angering some Canadian officials who felt they had been misled.
Still, it is difficult to parse the momentum of negotiations based on Trump’s public comments, as he has shown a willingness to try to posture and prod his foreign counterparts in public statements as a way to push them to act.