US President Donald Trump said China will be left with no other option but to enter into a trade deal with the United States because his increased tariffs on Chinese products is having an impact on its economy.
“The China deal is going to work out. You know why, because of tariffs, because right now China is getting absolutely decimated by companies that are leaving China going to other countries, including our own, because they don’t want to pay the tariffs,” Trump told CBS news in an interview.
In recent months, Trump has imposed additional tariffs on Chinese products worth USD 200 billion and he has ordered for another round of tariffs on rest of the Chinese imports amounting to USD 300 billion.
“And China will, in my opinion, based on a lot of facts and a lot of knowledge, China is going to make a deal because they’re going to have to make a deal,” he said.
“China will subsidise their product because they want to keep people working. So China is going to pay a lot. We have put 25 percent on USD 250 billion of Chinese goods coming into our country, including USD50 billion of high-technology equipment and things,” he said.
“You haven’t seen any or virtually any price increase because what China does basically their companies–they subsidize their companies because they want to keep people working. They want to stay competitive. We have another USD300 billion to go with China,” he said.
“I haven’t done that because it’s a very big thing for them, not for us. For us it’s not going to matter because we’ll be able to buy the product in other countries that don’t have the tariffs. So it’s not going to have an effect,” said the US president.
Later in the day, Trump told reporters that he will meet Chinese President Xi Jinping in Japan later this month on the sidelines of the G-20 Summit. Some reports say that Xi might skip the G-20 summit.
“I think President Xi of China — great relationship with him — I think he’ll be there. We are scheduled to talk and to meet. I think interesting things will happen. Let’s see what happens,” he said in response to a question.
“Right now, we’re getting 25 percent on USD250 billion worth of goods. That’s a lot of money that’s pouring into our Treasury. We’ve never gotten 10 cents from China. Now we’re getting a lot of money from China. I think that’s one of the reasons that GDP was so high in the first quarter, because of the tariffs that we’ve taken in from China,” he said.
“We always have the option to raise it another USD300 billion at 25 percent. And the 25 percent could be much higher than 25 percent,” he asserted.Subscribe to Moneycontrol Pro and gain access to curated markets data, exclusive trading recommendations, independent equity analysis, actionable investment ideas, nuanced takes on macro, corporate and policy actions, practical insights from market gurus and much more.