President Urges Companies to Produce Domestically to Avoid Tariffs

Daniel Fowler
May 14, 2019

US President Donald Trump said on Saturday that companies should produce goods "in the good old" United States in order to avoid impacts of increased tariffs, Trend reports citing Sputnik.

Trump's views on trade helped forge his path to victory in states such as Pennsylvania, Michigan, Wisconsin and OH, where he linked the loss of manufacturing jobs to the North America Free Trade Agreement and other trade deals.

Additionally, economic forecasters this week warned of the potential damage a trade war with China could wreak, particularly if China makes good on its threat to retaliate on the increased tariffs. In the Xinjiang Uighur Autonomous Region in western China, it has detained up to 2 million minority Muslims and forced them to undergo reeducation. President Donald Trump had announced plans to raise people tariffs via Twitter expressing frustration with the pace of discussions.

"Over the course of the past two days, the United States and China have held candid and constructive conversations on the status of the trade relationship between both countries", Trump tweeted.

Trump wrote on Twitter on Saturday that he thinks China felt they were being "beaten so badly" in the recent negotiations that they may as well wait for the 2020 presidential election "to see if they could get lucky & have a Democrat win - in which case they would continue to rip-off the US for $500 Billion a year".

Analysts say what happens next could have enormous implications for businesses, consumers and investors and for this reason they have their eyes set on future negotiations between the two sides.

Trump's approach on trade is a dramatic departure for the Republican Party, but GOP lawmakers have declined to take action that would block his tariffs.

According to the news agency PTI, before talks with reporters before leaving for Washington on Friday, Chinese Deputy Prime Minister Liu He said that he was optimistic, but to reach an agreement, the Trump Administration of United States needs to agree to abolish the penal charge (tariff) imposed on billions of dollars of Chinese products.

"We have a consensus in lots of areas but to speak frankly there are areas we have differences on, and we believe these concern big principles", Liu said. Mr. Liu named three critical points: the USA must remove all extra tariffs, set targets for Chinese purchases of goods in line with real demand, and ensure that the text of the deal is "balanced" to ensure the "dignity" of both nations. "It is inevitable", Liu said.

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Previous year the escalating trade tensions with the United States pummelled confidence and sent Chinese stock markets sliding about 30 percent. Some countries that are economically weaker than China have in fact spoken in caustic rhetoric about such matters and China is surely in a position to exert such leverage against Washington if it wanted to.

Liu voiced a measured optimism on reaching a deal, but said there were "issues of principle" on which China would not back down.

"When it comes to core interests China is not able to yield".

After weeks of rising optimism about the chances for an agreement, the tone out of the White House has veered from anger to nonchalance.

The lack of progress left major question-marks hanging over the search for a deal on trade - just one source of tensions in a growing geopolitical rivalry that's already shifting supply chains and testing established economic and security alliances. "Also, much easier & quicker to do". Consumer spending accounts for more than two-thirds of US economic activity.

American officials accuse Beijing of backtracking on commitments made in earlier rounds of negotiations.

China's Commerce Ministry vowed to impose "necessary countermeasures" but gave no details.

The US and China have gone through rough patches before.

A Chinese official has said that though talks are in their final stages, the sides are still "sprinting". The move rasied tariffs from 10% to 25% on a range of consumer products, including cell phone, computers and toys.

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