Stock futures slip in Asia as US-China trade standoff rages

Daniel Fowler
May 13, 2019

President Trump's chief economic adviser contradicted his boss Sunday on tariffs placed on imports from China by the U.S. The president had said that China will bear the cost.

Kudlow appeared for an interview on Fox News Sunday with host Chris Wallace to discuss the Trump administration's ongoing negotiations with China over trade.

"Fair enough", Kudlow said. China's top negotiator said the two sides would meet again in Beijing at an unspecified date, but warned that China would make no concessions on "important principles". Small setbacks are inevitable in bilateral negotiations, China's Vice-Premier Liu He said, adding: "Looking ahead, we are cautiously optimistic about the future". Yet nearly no economist has agreed with Trump's view and fact-checkers routinely brand Trump's assertion false and point out that American importers of goods from China pay the tariffs.

"The president and his administration have failed to realize we're stronger when we work with our allies on every issue - China included", she said on CNN's "State of the Union".

When Wallace noted Trump said that China pays the tariffs, "they may suffer consequences" but in reality "it's USA businesses and US consumers who pay", Kudlow again conceded that American consumers will "suffer".

Despite the president's trade war casting doubt into an already tumultuous year - hundreds of millions of dollars of crops were lost in the historic Midwestern flooding in March - farmers still want to back the president, according to a New York Times report, providing further evidence that the industry's support of Trump is based more in cultural positions than economic ones. (AP) China's leading envoy to trade talks in Washington says the failure to strike a deal in the tariffs war with the United States was "just a small setback".

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Trump ordered the increased duties on Friday after two days of talks to resolve the trade battle ended with no deal, although without a breakdown.

"Such an easy way to avoid Tariffs?" the US leader said, "Make or produce your goods and products in the good old USA".

The news comes on the heels of a recent decision by Trump to increase tariffs on about $200 billion worth of Chinese imports, from 10 percent to 25 percent.

Kudlow also said that Trump and China's President, Xi Jingping, may meet in late June at the G-20 global conference in Japan.

"I think that China felt they were being beaten so badly in the recent negotiation that they may as well wait around for the next election, 2020, to see if they could get lucky & have a Democrat win", he said, "in which case they would continue to rip-off the U.S. for $500 Billion a year". The United States is pressing China to change its policies on protections for intellectual property, as well as massive subsidies for state-owned firms, and to reduce the yawning trade deficit.

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