For volatile Trump, trade pacts with China, Europe prove elusive

Japan Times

2 days ago

U.S. President Donald Trump is eager to land more trade deals, but talks with China and Europe continue to languish amid communications breakdowns and fresh tariff threats.
So far, there have been few signs of a breakthrough with either of America's two biggest trading partners. In recent days, the path forward has only grown more complicated, with Trump engaging again in trade brinkmanship and pronouncements that have fueled tensions.
Friction between the U.S. and China increased as Beijing claimed Washington had "seriously undermined' a recent tariff truce and threatened to defend its interests — hinting at possible retaliation.
That came as the Trump administration accused the Chinese government of dragging its feet on lifting export controls on rare earths the U.S. saw as a linchpin of the deal.
The White House on Monday sought to push ahead with efforts to arrange a call between Trump and Chinese President Xi Jinping to ease tensions, with White House Press Secretary Karoline Leavitt saying she expected the leaders to speak this week. But representatives of the Chinese leader have yet to publicly reciprocate interest.
Meanwhile, the European Union issued a fresh warning of countermeasures if Trump follows through on his tariff threats.
The European Commission, which handles trade matters for the bloc, slammed Trump's promised 50% levy on steel and aluminum, saying it would undermine efforts to reach a resolution on trade barriers. Retaliatory measures are ready if no deal is reached, EU officials warned.
Trump's negotiating style is driven by his fundamental faith in tariffs as an economic tool to reshape global trade, as well as a belief that outsize threats would help deliver maximum results during the 90-pause on his April 2 higher duties to allow time for negotiations.
Thus far, that approach has delivered limited results.
Aside from the pause with China, the U.S. president has reached a broad framework with the U.K. Deals with other major partners that Trump and his advisers have promised for weeks have yet to materialize.
Despite the recent tumult, Trump's team has projected optimism that his approach will work.
Leavitt argued Monday that Trump's threats brought the EU to the negotiating table and that the White House remains "hopeful and optimistic' they will reach a deal.
"As you know, we are in discussions with many other countries around the world as well who understand the need to cut a good deal with this president and the administration,' she added.
Trump's tariffs are also under legal threat after the U.S. Court of International Trade ruled last week that the majority of the levies were issued illegally and ordered them blocked. The ruling was paused by an appeals court to give the body time to review it.
If the trade court ruling is upheld, it would deal a major setback for Trump's economic agenda and his ability to wield leverage with foreign capitals.
Still, U.S. officials have pointed to some opportunities for progress. U.S. Trade Representative Jamieson Greer is set to meet with his European counterpart this week in Paris. If a call between Trump and Xi does materialize, it would be their first known conversation since January, before Trump's inauguration.
Investors are watching the turbulent negotiations warily. European stocks edged lower Monday as global trade tensions rose. On Wall Street, stocks wavered as the tariff agenda caused market angst. As firms pulled back in the face of tariffs, U.S. factory activity contracted and a gauge of imports hit a 16-year low.
The fragile detente between the U.S. and China has been under threat in recent weeks as the U.S. has taken a series of actions that frustrated the Chinese government. The Trump administration announced it planned to start revoking visas for Chinese students. Officials have also moved to restrict the sale of chip design software and critical U.S. jet engine parts to China, and crack down on Huawei Technologies exports.
U.S. Treasury Secretary Scott Bessent has said a call between Trump and Xi might be necessary to move forward. On Sunday, he expressed confidence that a direct conversation between Trump and Xi will help the two nations iron out some of their issues.
"I think we're going to let the two principals have a conversation, and then everything will stem from that,' he said on CBS News' Face the Nation.
Trump's complaints about the EU are longstanding. He recently accused the bloc of slow-walking negotiations and unfairly targeting U.S. companies with lawsuits and regulations. He threatened a higher 50% tariff on the bloc starting June 1, but delayed it until July 9 after a phone call with European Commission President Ursula von der Leyen.