Amid an ongoing trade battle with China, US President Donald Trump has stated that a new trade agreement with China is ‘possible’, implying that he may be willing to ease tensions between Washington and Beijing, Bloomberg reports.
When asked if he would negotiate a new agreement with China, he told reporters on Wednesday, “It’s possible, it’s possible.” However, he did not give details about what such a deal would include.
Despite ongoing trade disputes, Trump praised Chinese President Xi Jinping. “There’s a little bit of competitiveness, but the relationship I have with President Xi is, I would say, a great one,” he said.
Trump previously inked a trade agreement with China in January 2020. Under the terms of the agreement, China committed to preserve US trade secrets, buy $200 billion in US products, and lower some trade barriers. However, the Covid-19 pandemic quickly damaged relations, and Trump blamed China for it.
They had about $50 billion worth of our product, and we were making them buy it. The problem is that Biden didn’t push them to adhere to it,” Trump said.
According to media reports, Trump’s comments during Asian trading hours sparked a modest increase in the Chinese yuan. The offshore yuan jumped 0.2%, while the onshore yuan rose 0.1%. Chinese stocks also recouped some losses.
“Markets are still getting used to the barrage of social media posts, comments to reporters, and interviews that President Trump is giving,” said Khoon Goh, head of Asia research at ANZ Banking Group. “This is so different from the previous administration,” he said.
One of the world’s two biggest economies, the United States and China, had been at odds with one another for years. This began in 2018, when the United States imposed further taxes on Chinese products. The US defended its actions by claiming that China did not trade properly. Furthermore, the US accused China of stealing ideas and intellectual property, which prompted US corporations to share their technology.
However, in response to the US’ moves against it, China put tariffs on US products such as soybeans and automobiles. This trend continued over the next few years, with both nations imposing additional tariffs, and the US even prohibiting Chinese tech company Huawei from utilizing US equipment.
On a positive note, in 2020, they negotiated a ‘Phase One’ agreement under which China agreed to buy more US goods and defend American enterprises, but significant tariffs remained. When Joe Biden became President of the United States in 2021, he did not eliminate most tariffs, instead focusing on preventing China from acquiring breakthrough technologies, such as computer chips.