President Donald Trump declared that China’s leaders “broke the deal” he was negotiating with them on trade. These comments come just before fresh talks that are already clouded by imminent tariff increases and Beijing’s threats of retaliation.
At a campaign rally Wednesday night in Panama City Beach, Florida, the president noted that top Chinese trade negotiator Liu was a “Good man,” Trump said, “but they broke the deal,” leading him to order higher tariffs.
China disputed Trump’s interpretation of what they did. “There have been various commitments made for us,” Commerce Ministry Spokesman Gao Feng said at his regular press conference in Beijing Thursday. “China is credible and honors its word and that has never changed.”
Global stocks slumped with U.S. equity futures Thursday while the yuan dropped to its weakest since January. Some analysts believe a collapse in talks could trigger a major selloff in risk assets.
Trump and his trade team discussed the next steps in the dispute and who should meet with Liu while he’s in Washington. The previous meeting became contentious when Treasury Secretary Steven Mnuchin made his case for putting trust in Liu that China would come back with a satisfactory offer to close the deal.
The president and his advisers concluded that he should only meet with Liu if the two sides make progress in the talks. Liu has had an Oval Office sit-down with Trump every time he traveled to the U.S. for trade talks in recent months.
U.S. Trade Representative Robert Lighthizer has been calling members of Congress telling them to brace for no deal and to confirm that the tariff increase is firm, one person briefed on the deliberations said.
The U.S. has said it would raise tariffs on $200 billion of Chinese goods to 25% from 10% Friday after alleging China reneged on provisions of a draft trade deal the White House considered settled. The Chinese government has said it will retaliate with “necessary countermeasures” if the U.S. raises tariffs.