Trump retreats from China tariffs amid White House trade discord

Bloomberg

President Donald Trump retreated from imposing tariffs on billions of dollars worth of Chinese goods because of White House discord over trade strategy and concern about harming negotiations with North Korea, according to people briefed on the administration’s deliberations.
Trump also succumbed to pressure from farm-state Republicans, who heavily lobbied the White House to resolve its trade differences with China, which had especially targeted US agricultural products with planned retaliatory tariffs.
Treasury Secretary Steven Mnuchin said that the administration’s plan to impose tariffs had been suspended, and Trump said on Twitter that the Chinese had agreed to purchase unspecified amounts of American farm products. Some of his loyalists led by former chief strategist Steven Bannon criticised the deal as a capitulation.
The agreement at least delays a trade war between the world’s two largest economies, a prospect that has rattled financial markets for months. But many US concerns about China’s economic practices remain unresolved: its acquisition of American technologies; the country’s plans to subsidise the growth of advanced domestic industries such as artificial intelligence and clean energy; and US companies’ access to China’s markets.
Bannon blamed Mnuchin. Trump “changed the dynamic regarding China but in one weekend Secretary Mnuchin has given it away,” he said in an interview. “Mnuchin has completely misread the geopolitical, military, and historical precedents, and what President Trump had done was finally put the Chinese on their back heels.”
Some White House officials blame poor coordination among the warring factions in Trump’s economic team for the retreat, according to several people briefed on the matter. Within the administration, divisions are raw between free-trade supporters such as Mnuchin and White House economic adviser Larry Kudlow and China hawks led by White House trade
adviser Peter Navarro.
During a trip to Beijing earlier this month, Navarro and Mnuchin argued about the US negotiating position, and Navarro wasn’t deeply involved last week in negotiations with a Chinese delegation in Washington.
The divisions are apparent in Trump’s public actions. In April, the Commerce Department cut off Chinese telecommunications company ZTE Corp. from its American suppliers in response to what Commerce Secretary Wilbur Ross called “egregious” violations of US sanctions against doing business in Iran and North Korea. Trump reversed the action via tweet a week ago, declaring that it would cost “too many jobs in China.”

‘BROAD OUTLINE’
The Wall Street Journal reported that China and the US have agreed on the “broad outline” of a settlement to the seven-year ban on ZTE.
Senator Marco Rubio, a Florida Republican who in recent days has been critical of how the Trump administration is handling trade issues with China, said that if the Journal story is true it means the US has “surrendered” to the Chinese on ZTE issues. He said Congress will begin working on a veto-proof legislative fix.
“Making changes to their board & a fine won’t stop them from spying & stealing from us,” Rubio said on Tuesday on Twitter. “But this is too important to be over.”
Asked about the report, a foreign ministry spokesman told reporters on Tuesday in Beijing that the trade deal is still being negotiated, without providing more detail. He repeated prior statements that a consensus had been reached and the US would send a delegation to China to work out the details.
“China is pushing the president around, and he seems to accept it,” Senator Chuck Schumer of New York said in a speech.