Trump's Push for Tariffs Squeezes a Weakening Global Economy

A woman walks past an electronic board showing Hong Kong share index outside a local bank in Hong Kong Wednesday Dec. 5 2018. Shares were moderatel

Mr. Trump said he agreed with Chinese President Xi Jinping on the outline for a trade agreement during dinner Saturday night at the Group of 20 summit in Argentina.

"It doesn't seem like anything was actually agreed to at the dinner and White House officials are contorting themselves into pretzels to reconcile Trump's tweets (which seem if not completely fabricated then grossly exaggerated) with reality", said an investor note issued by JPMorgan.

The disarray surrounding the China deal coincides with a global economy that faces other challenges: Britain is struggling to negotiate its exit from the European Union. A new US law, signed by Trump in August, FIRRMA, mandates that the United States conduct a "more robust worldwide outreach effort" to persuade allies to adopt stronger protections against Chinese attempts to buy or steal Western technology.

By Wednesday, Tariff Man had tweaked his message to suggest more optimism on the odds of forging a deal with President Xi Jinping. In September, Trump threatened to go all-in with tariffs on the remaining Chinese products "on short notice if I want" - a step that could have meant higher prices on popular imports such as Apple smartphones and Nike shoes.

Trump applauded the news in a tweet.

Trump tweeted early Wednesday that Beijing is sending "very strong signals" about a new trade framework since returning from talks over the weekend in Buenos Aires.

The White House has said China had committed to start buying more American products and lifting tariff and non-tariff barriers immediately, while beginning talks on structural changes with respect to forced technology transfers and intellectual property protection.

President Donald Trump and executives from Germany's biggest automakers discussed the companies' investments in the USA on Tuesday as trade tensions with the Europeans and Trump's threat to impose tariffs on foreign cars sold here loomed overhead.

Beijing has tried without success to recruit Europe, South Korea and other countries as allies against Trump.

During the talks in Buenos Aires, Trump agreed to delay a scheduled escalation in USA tariffs on many Chinese goods, from 10 percent to 25 percent, that had been set to take effect January 1. But U.S. exports of the product have drastically decreased after China slapped retaliatory duties of 25 percent on the product this spring. But any such pact is not a guarantee, given deep divisions that remain between the countries and the administration's insistence that China end its practice of pressuring USA companies to hand over valuable technology and trade secrets. USA officials believe that China's regulators nixed the deal not for reasons of antitrust, but because China is desperate to make its own chips and views any strengthening of Western chipmakers with alarm.

We are confident in implementation [of the agreement]. Even if the tariffs are lifted now, the United States crop is becoming less competitive in the Chinese market as the harvest season approaches in South America.

That includes more purchases of US farm products, which Trump - seemingly trying to remind Xi - has said will begin "immediately". The company said it wants to ramp up production in North America and is considering - although hasn't yet decided - whether to set up a second plant in the U.S.to make power trains.

The president, China's most powerful leader since at least the 1980s, flew from Argentina to Panama for an official visit and on Wednesday was in Portugal.

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