Trump Casts Doubt on Next Round of China Talks -- 3rd Update
09 August 2019 - 10:28PM
Dow Jones News
By Alex Leary and Katy Stech Ferek
WASHINGTON -- President Trump raised the possibility that trade
talks with China could break off, causing stocks to fall.
In comments to reporters on Friday, Mr. Trump indicated the U.S.
was prepared for the talks to be canceled. They were tentatively
set to take place in Washington next month.
"We'll see whether or not we keep our meeting in September. If
we do, that's fine. If we don't, that's fine. But it's time that
somebody does what we're doing," he said, referring to tariffs and
other measures the U.S. has taken against China over trade.
The Chinese Embassy in Washington didn't respond to a request
for comment.
Trade tensions between the U.S. and China escalated sharply last
week, when Mr. Trump vowed to impose 10% tariffs, starting Sept. 1,
on roughly $300 billion in Chinese imports that aren't currently
subject to levies.
The president acted following trade talks in Shanghai last
month, where U.S. and Chinese negotiators failed to reach an accord
that would see China commit to buying more U.S. farm goods in
return for the U.S. easing its restrictions on Chinese
telecommunications giant Huawei Technologies Co.
In his remarks Friday, Mr. Trump said the U.S. wouldn't be doing
business with Huawei, but said it may yet factor in trade
negotiations.
"We're not doing business with [them]," he said. But "that
doesn't mean they won't agree to something if and when they make a
trade deal."
The federal government is moving forward on several fronts to
block Huawei from the U.S. market. U.S. officials have warned that
Huawei products could be used to spy on or disrupt telecom
networks.
Mr. Trump was referring to government contracts, the White House
clarified later Friday.
The Office of Management and Budget this week laid out steps to
ensure U.S. government agencies aren't doing business with Huawei.
The company has sought to block those moves in court, calling the
effort unconstitutional.
At the same time, the Commerce Department is considering
granting exemptions that would allow U.S. companies to sell
components to Huawei despite a blacklist imposed in May. A senior
administration official said that process is continuing despite
China's decision this week to suspend U.S. farm purchases. Mr.
Trump has suggested that he could ease limits on Huawei in exchange
for China buying more U.S. agricultural products.
Fanning trade concerns, China also let the value of its currency
decline on Monday following the U.S. move to act on tariffs,
leading to the U.S. accusing Beijing of manipulating its
currency.
The salvos fired by both countries have stoked volatility on
Wall Street, which fears rising trade tensions could disrupt
economic growth. The next round of tariffs will also hit items such
as smartphones and apparel, where costs are expected to be passed
on to consumers.
Mr. Trump insisted that China was bearing the brunt of the trade
war by crimping its exports to the U.S.
"As of this moment they're having the worst year that they've
had in many, many years, in decades," Mr. Trump said. "And really
we're just bringing the system back into order. We have all the
cards. We're doing well. Our country is doing fantastically
well."
Federal Reserve officials have recently cited evidence that
uncertainty stemming from the trade war has weighed on business
investment and contributed to a slowdown in manufacturing -- major
factors in the central bank's decision to lower interest rates last
week.
Another risk from the trade war is the potential for market
turmoil that saps consumer and business confidence, causing
spending to retreat.
Nick Timiraos contributed to this article.
Write to Alex Leary at alex.leary@wsj.com and Katy Stech Ferek
at katherine.stech@wsj.com
(END) Dow Jones Newswires
August 09, 2019 17:13 ET (21:13 GMT)
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