Is Trump Backing Down on China Trade Threats?

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President Trump seems to have hit it off with the president of China, and as such appears to be backing down on some of his biggest trade threats.

During his campaign—and up until the meeting with President Xi Jinping earlier this month—Trump promised to label China a currency manipulator and potentially slap a 45 percent tariff on all imports from the country, and talk of a trade war started brewing.

Now, however, Trump has said he wouldn’t label China a currency manipulator, and said on Twitter on April 11: “I explained to the President of China that a trade deal with the U.S. will be far better for them if they solve the North Korea problem!”

Since then, Trump said China has been working to diffuse rising tensions in North Korea and has backed off on trade threats for the moment, which led some to say the president has softened his stance. But Trump is arguing otherwise.

“Nobody’s ever seen such a positive response on our behalf from China and then the fake media goes, ‘Donald Trump has changed his stance on China.’ I haven’t changed my stance. China’s trying to help us. I don’t know if they’re going to be able to or not, but would I want to start heavy, heavy trade or currency manipulation statements against somebody that’s out there right now that’s trying to stop what could be a very bad situation?” the president said in an interview on Fox & Friends.

The problem for many, including American businesses, is that Trump hasn’t maintained a consistent position on hot-button issues, like trade relations with China, and it’s leaving some lacking confidence in how to move forward. With a China trade war off the table for now, U.S. companies that were bracing for high import tariffs on goods from the Asian nation are realigning their efforts toward easing China investment restrictions the U.S. faces that China doesn’t, which are part of what renders the trade relationship imbalanced.

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The concern for others, though, is what policy promise President Trump might pull back on next.

One analyst says Trump’s next policy flip-flop could be on TPP

Trump pulled the U.S. from the 12-nation Trans-Pacific Partnership as he took office in January, but if the president could change his position on China, which bore the brunt of his wrath regarding trade for quite a while, it may not be entirely unlikely to reconsider a role in the TPP.

“Whoever thought that Trump would let China, a rival, off the hook on currency? If he can do that with a country that’s clearly not a friend, maybe he could reconsider reversing himself on TPP for a friend like Japan,” Sean King, senior VP of consultancy Park Strategies told CNBC.

Japan had taken the position that TPP would hardly be as valuable without the U.S. involved, but leaders in the country have said recently that they’re looking for a path forward for TPP even without the U.S. in tow.


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