US - China Trade News: Amid Trump Threats To Terminate Trade Agreement, Negotiators Could Talk Next Week

Amid heightened rhetoric over blame for the coronavirus pandemic, top U.S. and Chinese negotiators were expected to speak possibly as early as next week following President Trump’s threat to overturn the phase one trade deal signed in January, easing a two-year tariff war.

Trump has been trying to assign blame for the COVID-19 pandemic, which has ravaged the world economy and led 33 million Americans to file unemployment claims since mid-March.

April economic reports showed the value of China’s exports were up 3.5% over last year, with imports dropping 14.2%, for a trade surplus of $45.3 billion, the customs administration said Thursday. Economists had predicted an 11% drop in exports and 10% drop in imports.

The figures were not expected to sit well with the administration, which reported an 11.6% increase in the U.S. trade deficit this week, with a 9.6% drop in exports and 6.2% drop in imports.

“We are watching closely,” Trump said Wednesday. “They understand. They have a deal. Hopefully, they are going to keep the deal. We’ll see. They may; they may not. We are going to find out.”

The agreement requires China to buy an additional $200 billion in goods and services in the next two years compared to 2017 purchases. The purchases so far have missed their targets. Trump Sunday threatened to terminate the agreement and reimpose tariffs as punishment for the pandemic – which Chinese officials have likened to blaming the victim.

The South China Morning Post reported U.S. oil export targets were missed amid the oil glut and low prices that made purchasing oil from the Middle East much more attractive to Beijing. Though U.S. soybean exports were up 210% in the first three months of 2020, the first two weeks of March saw no exports to China. Overall exports to China were lower.

Treasury Secretary Steven Mnuchin said China is expected to meet its obligations, and if not, “there would be very significant consequences in the relationship and in the global economy as to how people would do business with them.”

U.S. Trade Representative Robert Lighthizer and Chinese Vice Premier Liu He were expected to discuss the agreement signed just before the severity of the initial outbreak in Wuhan became apparent. The deal called for Liu and Lighthizer to consult every six months. A meeting next week moves up the schedule.