President Donald Trump said Wednesday that he'll keep tariffs on China until he's sure the Chinese are complying with any trade deal, rebutting expectations that the two nations will agree to roll back duties as part of a lasting truce to their trade war.
"We're not talking about removing them, we're talking about leaving them for a substantial period of time, because we have to make sure that if we do the deal with China that China lives by the deal," Trump told reporters at the White House on Wednesday before leaving for Ohio. "They've had a lot of problems living by certain deals."
The president's comments dim hopes that round-the-clock trade negotiations between the world's two biggest economies could lead to them removing the roughly $360 billion in tariffs they've imposed on each other's imports. China has pushed for the Trump administration to remove tariffs as part of any deal.
U.S. officials are concerned that China is pushing back against some American demands in trade talks, people familiar with the matter said. Chinese officials have shifted their stance because after agreeing to changes to their intellectual-property policies, they haven't received assurances from the Trump administration that tariffs imposed on their exports would be lifted, the people said.
Despite his comments on the tariffs, Trump said that "the deal is coming along nicely."
Trump's comments came as talks between the two countries have reached a critical stage. Some White House officials had hoped that Trump and Chinese leader Xi Jinping would be able to meet and ratify a new trade deal later this month.
But negotiations have bogged down in a dispute over what would happen if China did not abide by the terms of any new deal, as well as Trump's demand for far-reaching changes in China's state-led economic system.
Trump argues that China for years has abused U.S. companies and consumers by ripping off intellectual property, unfairly subsidizing Chinese businesses, and manipulating China's currency in a way that makes it harder for U.S. firms to compete.
He threatened to raise the rate from 10 percent to 25 percent and expand the tariffs even more broadly if China didn't agree to negotiate major changes.
During a meeting in November, Xi and Trump agreed to start formal talks, and Trump said he would suspend any decision on raising the tariffs until March 1. As talks continued and it appeared that progress was being made, Trump said he would defer the decision about raising tariffs indefinitely.
In February, it appeared the White House and Chinese leaders were within striking distance of completing a deal, and Treasury Secretary Steven Mnuchin told reporters that a major agreement had been reached on currency manipulation.
But in the days after those remarks, other White House officials said a deal has remained elusive.
And it has always remained unclear what would happen to the existing tariffs if a deal was reached. Trump's comments Wednesday were the first time he said he had no plans to lift the tariffs immediately after an agreement, a pronouncement that could anger Chinese leaders.
In a continuation of efforts to hammer out a deal, U.S. Trade Representative Robert Lighthizer and Mnuchin will travel to Beijing next week for high-level talks, said a senior administration official who asked not to be identified.
One of the remaining sticking points in talks is whether the tariffs would be lifted immediately or over a period of time to allow the U.S. to monitor whether China is meeting its obligations, Bloomberg News reported earlier this month. The U.S. wants to continue to wield the threat of tariffs as leverage to ensure China won't renege on the deal and would lift the duties fully only when China implemented all parts of the agreement.
U.S. stocks extended their decline Wednesday after the president's remarks. The Dow Jones industrial average fell 141.71 points, or 0.5 percent, to close at 25,745.67, recovering from an intraday drop of more than 216 points.
A slowdown in China's economy -- not the trade war -- is now the biggest risk for investors for the first time in almost two years, according to the latest fund manager survey by Bank of America Merrill Lynch.
About a third of investors polled said slower growth in China is their biggest concern, replacing trade war risks, which had topped the list for nine straight months, according to a survey of 186 fund managers conducted this month by the bank. A corporate credit crunch came in third, followed by U.S. politics.
Information for this article was contributed by Jennifer Jacobs and Andrew Mayeda of Bloomberg News; and by Damian Paletta and Felica Sonmez of The Washington Post.
A Section on 03/21/2019