WASHINGTON -- President Donald Trump criticized China on Friday, saying it was failing to hold up its end of the trade deal and that he was "very torn" about the fate of the agreement signed in January, even as his closest economic advisers released a statement reassuring the world that the truce was intact.
"Look, I'm having a very hard time with China," Trump said in an interview on Fox & Friends, lamenting how recent economic disruptions tied to the coronavirus had overridden "a great trade deal."
When asked whether the deal might be falling apart, Trump was noncommittal.
"I have not decided yet, if you want to know the truth," he said.
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Trump's comments came just hours after top trade and financial officials held talks via conference call, their first since the coronavirus started to become widespread in late January. In separate statements, the two countries signaled that their agreement was on track.
"Both sides agreed that good progress is being made on creating the governmental infrastructures necessary to make the agreement a success," the Office of the U.S. Trade Representative said. "They also agreed that in spite of the current global health emergency, both countries fully expect to meet their obligations under the agreement in a timely manner."
The future of the trade deal, which brought an end to tariff escalations and set the two countries toward a more cordial relationship, has been called into question in recent days by Trump, who has expressed anger over China's response to the coronavirus and has suggested the United States could retaliate for China's failure to contain the disease.
Trump suggested this week that the White House would take a skeptical look at whether China was living up to its commitments under the truce.
Those comments had rattled stock markets, and the joint statement released Friday morning seemed aimed at reassuring businesses and investors that the world's largest economies were not on the cusp of restarting the trade war.
Yet deep uncertainty surrounding the U.S.-China relationship remains. As the nations spar over a series of issues -- including the pandemic; misinformation campaigns; China's policies toward Hong Kong, Taiwan and the South China Sea; and trade -- relations have reached a level of hostility not seen even in the depths of the trade war last year.
Trump and many of his advisers continue to see the trade agreement signed with China last year as a signature achievement. But they have been worried and angered by recent data showing that China is falling behind on its promises to buy $200 billion of additional U.S. exports by 2021.
GOOD WILL WANES
Chinese negotiators face nationalists at home who favor a more antagonistic relationship. And Trump's campaign team and Republican lawmakers want to take a hard stance on China.
Trump and political rival Joe Biden, the former vice president, have painted each other as weak on China in recent campaign ads.
As he has throughout his presidency, Trump has continued to alternate between praise and criticism of China. But his optimism about the trade deal appears to have slowly evaporated in recent weeks.
In early April, Trump said he believed that Chinese leader Xi Jinping would "honor the deal" he made with the United States "because I know President Xi, who I like and respect," Trump said.
The phase-one agreement keeps 25% tariffs in place on a wide variety of imports from China that the Trump administration considers to have strategic or economic value, such as cars or nuclear reactor components. It requires China to strengthen intellectual property protection and open its markets to foreign financial services companies.
The agreement also calls for China to increase its U.S. imports by $200 billion compared with levels in 2017, before the trade war began.
The chapter on extra purchases, one of seven chapters in the agreement, mandates specific increases in four categories of China's imports from the United States: food, manufactured goods, energy and services.
PANDEMIC CURBS TRADE
China has increased its imports of U.S. food since the pact was signed. But its overall imports of other U.S. goods have fallen short of the administration's initial hopes.
China's total imports from the United States fell 5.6% in the first four months of this year compared with the same period last year, according to China's trade data. According to an analysis by the trade-data company Panjiva, China's imports in March of the goods it promised to buy in the trade deal were just 44% of their target level, and Chinese trade data suggested April might be worse.
Given the economic catastrophe caused by coronavirus, that is no surprise, analysts said.
China is still struggling to recover from its efforts to stamp out the coronavirus, which included shutting vast parts of its industrial machine; its economy shrank for the first time in nearly half a century. The United States is still debating when to end its own lockdowns, which have contributed to the loss of millions of jobs.
"There's no chance whatsoever that the purchasing targets will be met," said Scott Kennedy, a China expert at the Center for Strategic and International Studies.
Economists said plummeting consumer demand in China would likely translate to fewer purchases of American cars and Boeing aircraft, making it hard for China to meet the target for buying manufactured goods.
Shutdowns in U.S. slaughterhouses could limit the amount of pork, beef and other American agricultural products available for purchase. And the price of oil and gas has collapsed, meaning China would have to buy many more barrels to meet a $50 billion target by the end of the next year.
Business on 05/09/2020