Trump Changes His Tone on Trade at G-20

Date: Friday, June 28, 2019
Source: The Wall Street Journal

President says there will be ‘very big’ trade deals with India and Japan; sounds hopeful about working things out with Iran

OSAKA, Japan—President Trump struck a conciliatory tone on some trade issues at the Group of 20 summit here Friday, and world leaders called on the U.S. and China to work out their differences.

Mr. Trump said he expected a “productive meeting” with Chinese President Xi Jinping on Saturday, when the two leaders will seek to get trade talks back on track with the threat looming of 25% U.S. tariffs on virtually all Chinese imports.

Japanese Prime Minister Shinzo Abe, who was playing host at the meeting of leaders of the world’s 20 leading economies, said he was worried about protectionism spreading.

“I am deeply concerned about the current situation in world trade,” Mr. Abe said at the opening of the meeting, with Messrs. Trump and Xi nearby. “Now is the time to send a strong message that we will preserve and strengthen a free, fair and nondiscriminatory trading system.”

At the leaders’ meeting, at least half a dozen attendees expressed worries about the effect of trade tensions on global growth, according to a Japanese official.

“In our talks both with the U.S. and the Chinese authorities, I was drawing attention to the harmful impact this controversial matter is creating,” said European Commission President Jean-Claude Juncker.

Ahead of their meeting, Messrs. Trump and Xi traded indirect barbs at a session on the digital economy. Mr. Xi said each country had the right to set its own rules, while Mr. Trump, without naming China, criticized policies that “restrict digital trade flows.” He said the U.S. had to ensure the security of its next-generation cellular data networks, a reference to restrictions placed on Huawei Technologies Co.

European officials said negotiations on a final G-20 statement were more difficult than in previous years. They said no agreement was in sight on language discussing the Paris climate accord—from which Mr. Trump has withdrawn the U.S.—or on trade and steel overcapacity, a thorny issue for China.

Mr. Trump assuaged concerns that he would provoke new tensions with allies, saying there would be “very big” trade deals to announce with Japan and India. He shared a three-way fist bump with Mr. Abe and Indian Prime Minister Narendra Modi.

Before the summit, Mr. Trump said on Twitter that Indian tariffs recently announced against the U.S. were “unacceptable” and “must be withdrawn.” Those tariffs followed Mr. Trump’s decision to exclude India from a group of developing nations eligible for preferential tariffs on goods imported to the U.S. New Delhi had previously delayed implementing its tariffs in hopes the U.S. would reconsider earlier steel and aluminum tariffs aimed at India.

The president didn’t raise the issue in brief remarks to reporters as he sat with Mr. Modi. “I think we’ll continue to get along with India,” Mr. Trump said. Indian Foreign Secretary Vijay Gokhale said Messrs. Trump and Modi agreed trade talks should resume soon.

Mr. Abe, who has his own trade difficulties with the U.S., presented Mr. Trump with a piece of paper showing recent investments in the U.S. by Japanese makers of autos and auto parts. “We’re very happy about that,” the president said.

He didn’t repeat criticism he expressed in a Wednesday interview on Fox Business Network, when he said the U.S.-Japan treaty governing their military alliance was one-sided. “If we’re attacked, Japan doesn’t have to help us at all. They can watch it on a Sony television,” Mr. Trump said.

Japanese officials said the security treaty didn’t come up at Friday’s meeting between Messrs. Trump and Abe, and they said the two leaders have never discussed revising it.

Tensions between the U.S. and Iran are also looming over the summit, with foreign leaders calling for restraint. Mr. Trump, who last week called off a retaliatory strike against Iran for shooting down an unmanned reconnaissance drone, sounded hopeful about working things out.

“We have a lot of time—there’s no rush, they can take their time,” Mr. Trump said at the beginning of his meeting with Mr. Modi. “Hopefully in the end it’s going to work out.”

G-20 leaders adopted a statement on the digital economy, pledging to have rules-based online trade implemented by the World Trade Organization. They set a goal of agreeing by 2020 on a plan for how digital services could be taxed.

And they called for changes to keep the WTO functioning. An appellate body at the WTO that handles trade disputes could become dysfunctional by the end of the year because the U.S. has refused to appoint new judges.

Amid the blitz of meetings with global leaders, Mr. Trump took time out to address domestic politics. At a meeting with German Chancellor Angela Merkel, Mr. Trump said he had “just passed a television set” and watched the debate by Democratic presidential candidates.

 

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