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Trump says U.S.-China trade war could go past 2020 election

  • A computer screen shows images of Chinese President Xi Jinping, right, and U.S. President Donald Trump as a currency trader works at the foreign exchange dealing room of the KEB Hana Bank headquarters in Seoul, South Korea, Monday, Aug. 26, 2019. Asian shares tumbled Monday after the latest escalation in the U.S.-China trade war renewed uncertainties about global economies, as well as questions over what Trump might say next. (AP Photo/Ahn Young-joon)

The Washington Post
Published: 9/21/2019 9:02:02 PM
Modified: 9/21/2019 9:02:00 PM

WASHINGTON — The White House is temporarily sparing more than 400 Chinese products from tariffs, even as President Donald Trump suggested Friday that the trade war could extend beyond the 2020 election.

The exemptions apply to a wide assortment of goods ranging from plastic straws and coffee filters to car radiators and dog leashes, according to documents published Friday by the Office of the U.S. Trade Representative. The 437 products were among those swept into the trade war last year when the White House slapped tariffs on $250 billion in Chinese goods.

The decision marks the latest twist in the yearlong conflict, intended not only to mollify Beijing but also help American businesses hurt by Trump’s tariffs, particularly as he and members of his administration have made inconsistent statements around the possibility of a trade deal.

Speaking to reporters on Friday, Trump said he didn’t believe a deal needed to be reached with China before next year’s presidential election, thanks in part to a strong U.S. economy. He said he wasn’t looking for a partial trade deal, but rather “for the big deal,” even if that wasn’t achieved before 2020.

“I’d rather get the whole deal done,” Trump told reporters last week. “We’ve taken in many, many billions of dollars of tariffs. I’d rather get the entire Chinese done — look, if we’re going to do the deal, let’s get it done.

“A lot of people are talking about it,” he said, “and I see a lot of analysts are saying an interim deal, meaning we’ll do pieces of it — the easy ones first. But there’s no easy or hard. There’s a deal or there’s not a deal. But it’s something we would consider, I guess.”

Trump is counting on a strong economy to propel him to reelection, but there have been signs of a slowdown. Manufacturing is in a recession, businesses have cut spending, and Trump’s trade war is starting to bite businesses and consumers. Wall Street often gets rattled by Trump’s unpredictable and sometimes contradictory jousts with China.

A new survey from the Institute for Supply Management showed that factory activity shrank in August for the first time in three years. New orders for manufactured goods dropped for the second month in a row to a level not seen since late 2009, and production and employment contracted for the first time in three years. Another report from IHS Markit confirmed the findings, which showed the weakest manufacturing activity in nearly 10 years.

All told, the agency granted the exclusions from 1,100 requests made by companies and other U.S. entities. The order also exempted outdoor wick-burning torches, certain electric-powered skateboards and motorcycles, parts of swimming pool vacuum cleaners and water drinking fountains for pets.

Companies are permitted to request exemptions from new tariffs, typically on the grounds that it would be very difficult or expensive to find the items in another country.

But the exclusion process is an opaque one, said Chad Bown, a senior fellow at the Peterson Institute for International Economics. Bown said it isn’t entirely clear what determines which companies prevail, or not, especially when there’s so little precedent for how the government handles and responds to these sorts of requests.

And as companies try to dodge the effects of Trump’s tariffs, Bown said, the exclusions could actually sow further divisions within the business community. It may become a priority for some companies to get their products off the lists, rather than mobilize in a broader pushback against Trump’s trade war.

“In a very important sense, [the exemptions] can quell some dissension and displeasure that might be publicly voiced by American companies that are actually being harmed,” Bown said. “They’re holding out hope that theirs is the one product that is exempt.”

Documents from the U.S. Trade Representative lay out three sets of exclusions. One set, which is based on tariffs on $200 billion worth of goods implemented last September, will expire in August 2020. Another set, based on tariffs of $16 billion worth of goods implemented last August, will expire this time next year. A third set of exclusions, based on tariffs on $34 billion worth of books that took effect last July, will also expire this time next year.

Last week, China said it was canceling planned tariff increases on American soybeans and pork. Days before, China had eased tariffs on 16 U.S. products, including alfalfa and lubricant oils. Trump responded by delayed a planned tariff increase on $250 billion of Chinese goods until Oct. 15 to avoid conflicts with Beijing’s plans to celebrate the 70th anniversary of the Chinese revolution.

The two nations are currently holding mid-level talks ahead of the October trade negotiations. Previous negotiations have repeatedly broken down, and there was little telling how the preliminary talks could substantively affect the meetings between Trump and Chinese President Xi Jinping next month.

Trump has at times lashed out at Chinese President Xi Jinping in ways that seem to mesh personal grievances with national policy. A few weeks ago, Trump called Xi an “enemy” and called on American companies to ditch China, saying the U.S. “would be far better off” if it weren’t intertwined with the China.

Trump then lumped Xi in with Federal Reserve Board Chair Jerome H. Powell, who is also a frequent target of the president’s ire, asking in one tweet “who is our bigger enemy?”

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