President Trump: “Very good chance” of US-China trade deal

President Donald Trump is sending his top economic advisors to Beijing in a bid to head off a looming US-China trade war.

“I think we’ve got a very good chance of making a deal,” President Trump told reporters during French President Emmanuel Macron’s visit to the White House.

If an agreement isn’t reached, President Trump is expected to impose tariffs on US$150 billion of Chinese imports, to which China has vowed to retaliate with tariffs worth US$50 billion on American goods – particularly those from the US agricultural industry and sectors at the heart of Trump’s voter-base.

Larry Kudlow, Director of the White House’s National Economic Council, will join US Treasury Secretary Steve Mnuchin, US Trade Representative Robert Lighthizer and Trump trade advisor Peter Navarro in next week’s visit.

In an interview with CNBC, Kudlow said that the visit will cover a “broad area,” discussing all the disputes between the two sides, including China’s “unfair trading practices, illegal trading practices, technology related issues and technology theft,” as well as barriers and tariffs.

Observers have questioned whether the Trump Administration will be able to carry through its threats. The Washington Post quoted Derek M Scissors, a senior fellow at the American Enterprise Institute, as stating that “China is not going to give us what we really want, which is for them to be a good economic partner. China would have to fundamentally abandon their industrial policy. They are not going to do that.”

However, China has responded positively to the prospect of talks, with state media outlet Xinhua citing Premier Li Keqiang as saying Beijing ‘values the willingness the United States to address the current trade friction through dialogue.’

“It is what the international community expects from our two countries,” Li said. “As the largest developing country and developed country in the world, China and the United States are highly complementary in the economy.”

The Premier also inferred that China is prepared to collaborate with the US on “transportation, such as autonomous driving” – comments potentially relating to recent exchanges between Washington and Beijing on giving the US wider access to China’s auto industry.

Fears of a trade war have rattled markets.  The International Monetary Fund (IMF) warned last week that rising trade tensions between the two sides could undermine a global economy that would otherwise grow solidly this year, as reported by The New York Times.  IMF Chief Economist Maurice Obstfeld told reporters that global growth this year is forecast at 3.9 per cent, the fastest pace since 2011, but this bright outlook could be derailed by a major trade conflict.