Is Trump going soft on China?

Donald Trump may be getting ready to tone down his trade war on China.


DONALD Trump may be raising a white flag with China over trade, as his administration eyes off new laws suggesting a less hostile approach.

Since his campaign trail, the President has been outspoken about his opposition to Beijing’s global trade policy.

In May last year, he told a rally in Indiana the country was responsible for “the greatest trade theft in the history of the world”.

“We can’t continue to allow China to rape our country, and that’s what we’re doing,” he told the crowd.

He warned of a trade war with the rising superpower and vowed to impose a 45 per cent tariff on Chinese imports.

He also threatened to label the country as a currency manipulator — a move slammed by economic analysts who said it would contribute to rising tensions between the two nations.

Following his election win, Mr Trump seemed to only ramp up his rhetoric against the country.

But judging by its next potential move, the White House now seems keen to avoid direct confrontation with China over the issue.

NEW WHITE HOUSE PLAN TO TARGET DODGY TRADE

Mr Trump is eyeing off new legislation to deter currency manipulation by any country, rather than China specifically, sources told The Wall Street Journal.

Under the plan, the US Commerce Secretary would deem it an “unfair subsidy” for any country to employ the practice, rather than singling out China as the President has vowed to do.

Basically this would allow specific companies that feel they’ve been hurt due to currency manipulation — by any country — to take their complaints to the Commerce Department and request an appropriate charge.

On one hand, analysts believe this plan could have a positive effect.

A number of other countries have been accused of currency manipulation at the expense of others.

Trump adviser Peter Navarro recently accused Germany of the practice — a move some analysts have disputed.

Likewise, Commerce Secretary nominee Wilbur Ross has warned Mexico and Canada that he will begin renegotiating trade agreements with both countries.

Japan and Switzerland are also among the countries accused of currency manipulation.

Making a rule that doesn’t target China specifically would ensure every country is held accountable.

Also, companies would need to provide proper evidence of currency manipulation and illustrate the negative consequences on their businesses.

There’s also hope it could alleviate some of the tension that’s risen between the US and China over the issue of trade.

China’s trade practices have been a controversial topic in the US for some time now.

China’s trade practices have been a controversial topic in the US for some time now.Source:News Limited

But the idea may not go down too well with the World Trade Organisation if it’s found to violate the organisation’s rules.

This, as the WSJ notes, is why the Obama administration never implemented a similar tactic.

Likewise, Axios notes that it may ultimately be a redundant move — at least on a practical level.

“It is already the position of the government that currency manipulation is bad, so this would take a symbolic act and make it even more symbolic,” Axios notes. “The labelling of a country as a currency manipulator simply requires the Administration to begin negotiations with that country on the subject, and subsequently bring action against the country at the International Monetary Fund if no remedies are made.”

The currency plan has not been confirmed yet, and will still need to be reviewed by cabinet officials including Steven Mnuchin, who was confirmed as the administration’s Treasury secretary earlier this week.

But if nothing else, it suggests there may still be time for the new President to dial down his aggressive stance towards China.

Could this signify that Mr Trump is going to tone down his aggression towards China?

Could this signify that Mr Trump is going to tone down his aggression towards China?Source:AFP

This isn’t the first recent sign of Mr Trump appearing to pour cold water on the countries’ ongoing feud.

In a phone call with President Xi Jinping last week, the celebrity billionaire backtracked on his threat not to uphold the controversial “One China” policy.

According to the White House, the President reiterated his country’s traditional stance of recognising Beijing sovereignty over Taiwan, after he earlier threatened to cease doing so unless China compromised on trade.

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