US President Donald Trump expressed doubts over his recent trade agreement with Beijing because of the Covid-19 pandemic and suggested that America would save US$500 billion if Washington “cut off” the bilateral relationship.
Speaking about a wide range of grievances with China in a pre-recorded Fox Business Network interview, Trump said: “I have a very good relationship [with China’s President Xi Jinping], but I just, right now I don’t want to speak to him.”
“They should have never let [the pandemic] happen. So I make a great trade deal and now I say this doesn’t feel the same to me,” Trump said. “I’m very disappointed in China.”
“The ink was barely dry and the plague came over, and it doesn’t feel the same to me,” he said referring to the phase-one trade deal he signed with Chinese Vice-Premier Liu He in January, under which China is committed to buying an additional US$200 billion worth of US goods over two years.
Trump, however, said “they will buy US$250 billion”, without accounting for the extra US$50 billion.
Doubts about China’s ability to meet the deal’s purchasing commitments have escalated for reasons on both sides, most directly or indirectly related to the pandemic.
Exports of pork to China, for example, will be difficult to increase because US production has dropped following Covid-19 outbreaks at processing plants run by companies including Smithfield Foods and Triumph Foods. China’s WH Group owns Smithfield.
“Given supply conditions in the United States, even for example with China short on pork right now because of African swine flu, American meat packers are not really in a position because of the virus to be a part of the export boom to meet China’s needs,” Daniel Rosen, founder of New York-based research consultancy Rhodium Group, said in an online discussion organised by the National Committee on US China Relations on Wednesday.
At the same time, Beijing is limited in the degree to which it can enact stimulus measures, Rosen said.
“China is sort of at the fairly thin end of leading economies in terms of its stimulus,” he explained. “The evidence suggests they won’t be able to stimulate nearly as much this time as they did last time around”, when Beijing took strong fiscal measures to stabilise its economy amid the financial crisis of 2009.
China sustained a first quarter economic contraction of 6.8 per cent, which will likely dent domestic demand.
While the government’s official jobless figures do not account for migrant workers – a substantial chunk of the labour market – A research report by brokerage firm Zhongtai Securities in late April put the real jobless rate at 20.5 per cent with 70 million unemployed,
Asked about Republican Senator Tom Cotton’s suggestion last month that US visas should be denied to Chinese students applying to study in fields including quantum computing and artificial intelligence in the interest of national security, Trump said: “There are many things we could do … We could cut off the whole relationship”.