Because of the Covid-19 pandemic, US President Donald Trump suggested that America would save US$500 billion if Washington “cut off” the bilateral relationship with China, after expressing doubts over his recent trade agreement with Beijing.
“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.” Trump said in a pre-recorded Fox Business Network interview, on which he aired his long list of grievances with the Chinese government.
“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.”
Trump was referring to the phase one trade deal he signed with Chinese Vice-Premier Liu He in January 2020, which stipulated China’s agreement to buying an additional US$200 billion worth of US goods for the duration of two years.
Trump said“The ink was barely dry and the plague came over, and it doesn’t feel the same to me,”
Without accounting for the extra US$50 billion, Trump said “they will buy US$250 billion”.
Due to reasons directly or indirectly related to the Covid-19 pandemic, strong doubts have been raised by both nations on China’s ability to keep to its commitment to the phase one trade deal.
For example, one food product in particular is the export of pork to China, which the US will have difficulty to meet due to the drop in production at major processing plants like Smithfield Food and Triumph Foods, due to the Covid-19 outbreak. Coincidentally, Smithfield Foods is owned by the Chinese WH Group.
“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,” said the founder of New York-based research consultancy Rhodium Group, Daniel Rosen, during an online discussion held on Wednesday organized by the National Committee on US China Relations.
According to Rosen, Beijing at the same time, is limited in the degree to which it can put stimulus measures into practice.
“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”, referring to when Beijing took strong fiscal measures to stabilize its economy during the 2009 financial crisis.
The Chinese government reported a first quarter economic contraction of 6.8 per cent, which will impact domestic spending.
While the official unemployment rate from the government excludes migrant workers who make up a significant portion of the workforce, a study conducted by brokerage firm Zhongtai Securities in late April estimated that the real unemployment rate stands at 20.5 per cent which is about 70 million unemployed.
Trump’s reply to a question put forward on Republican Senator Tom Cotton’s suggestion last month to deny visas to Chinese students applying to study subjects like quantum computing and artificial intelligence based on the interest of nation security was: “There are many things we could do … We could cut off the whole relationship,”
Based on the estimated yearly value of products the US imports from China, Trump said, “You’d save US$500 billion if you cut off the whole relationship”.
A suggestion by US Secretary of State Mike Pompeo, that the origins the coronavirus pandemic could have been a contagion deliberately created in a Chinese laboratory, which was largely debunked by US intelligence, was discounted by Trump. However, the President has not gone back on his allegations that China did not take measures to control the spread of Covid-19.
“I don’t know if they made a decision, but it got out of control,” Trump said. “I think more likely it got out of control … We have a lot of information, and it’s not good. Whether it came from the lab or came from the bats, it all came from China, and they should have stopped it.”
Trump also took the opportunity to strike out at American “globalists” who gave out many manufacturing jobs in the US to other countries.
“These stupid supply chains that are all over the world, we have a supply chain where they’re made in all different parts of the world and one little piece of the world goes bad and the whole thing is messed up,” Trump said.
“I said we shouldn’t have supply chains. We should have them all in the United States. We have the companies to do it and if we don’t, we can do that,” said the man who wants to make America great again.
15th May 2020 15:20
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