via Zerohedge:
In a sharp escalation in the war of words between the US and China, on Tuesday President Trump said he’s personally holding up a trade deal with China, adding that that he won’t complete the agreement unless Beijing returns to terms negotiated earlier in the year.
“It’s me right now that’s holding up the deal,” Trump said, quoted by Bloomberg, adding that “we’re going to either do a great deal with China or we’re not going to do a deal at all.”
Earlier in the day, the SCMP reported that the U.S. was accused of demanding “enormous, even hundreds” of changes to Chinese laws to protect intellectual property, which was the key factor in the collapse of the two nations’ trade talks, according to an interview with Chinese government adviser Shi Yinhong on the sidelines of a conference in Hong Kong.
Shi, an adviser to China’s State Council and also a scholar at Renmin University, said U.S. insistence on strong IP protections is asking too much of Beijing and Chinese officials started to think “no deal is better than a bad deal” from early May. Shi also said the gap between the two nations on technical aspects of the agreement widened as negotiations advanced, and hit an insurmountable hurdle once the U.S. presented the Chinese with list of hundreds of IP infringements that it wanted to be addressed. “The trade war is not about the trade surplus. It’s a U.S. effort to change how the Communist Party runs the nation’s economic activities at home and abroad,” Shi said.
As was reported last month, the U.S. accused China of reneging on provisions of a tentative trade deal, bringing talks to a halt. “We had a deal with China and unless they go back to that deal I have no interest,” Trump said.
Trump’s comments came a day after he threatened to raise tariffs on China if President Xi Jinping doesn’t meet with him at the upcoming Group of 20 summit in Japan. Trump told reporters that he could impose tariffs of 25% or “much higher than 25%” on $300 billion in Chinese goods.
The ultimatum puts Xi, whom Bloomberg dubbed China’s strongest leader in decades, in “the toughest spot of his six-year presidency.” If Xi caves to Trump’s threats, he risks looking weak at home. If he declines the meeting, he must accept the economic costs that come with Trump possibly extending the trade conflict through the 2020 presidential elections.