President Donald Trump said substantial additional US tariffs would be placed on goods from China if there's no progress on a trade deal after his planned meeting with Chinese counterpart Xi Jinping at the G20 Summit in Japan.
"My Plan B with China is to take in billions and billions of dollars a month and we'll do less and less business with them," Trump said Wednesday during an interview with Fox Business Network's Maria Bartiromo. The White House announced his meeting with Xi would take place at 11:30 on Saturday in Osaka.
Trump has previously said he may decide to raise tariffs on the remaining $300 billion of Chinese imports if he doesn't like what he hears from Xi at this weekend's summit in Osaka. Asian stocks advanced Thursday on optimism Trump and Xi would reach a truce at their highly anticipated meeting.
The president's latest remarks added an element of doubt to Treasury Secretary Steven Mnuchin's comment earlier Wednesday on CNBC that he's "hopeful" about US-China trade negotiations.
There has been no change to China's conditions for making a trade deal with the US as the two nations' leaders prepare to meet, a government spokesman said in Beijing Thursday.
An alternate course as the trade talks resume may be that US suspends the next round of tariffs on the additional $300 billion of Chinese imports, Bloomberg reported Tuesday. If the tariffs on the broader set of goods does go into effect, it could be at a 10% rate rather than 25%, Trump said in the television interview Wednesday.
"My plan B's maybe my plan A, my plan B is that if we don't make a deal I will tariff, and maybe not at 25%, but maybe at 10%," Trump said in the interview Wednesday.
Trump criticised a range of trading partners in the interview, including Germany and Vietnam, which he called an "abuser" when responding to a question about companies relocating production from China to that country following US-imposed tariffs.
Trump later took a shot at India, saying he would ask Prime Minister Narendra Modi to withdraw an "unacceptable" increase in tariffs on US goods. It was his first direct response to India's move earlier this month to raise tariffs on a slew of products from walnuts to pulses, which was delayed since last year as Modi sought talks.
In the Fox Business interview, Trump said he likes China and Xi but added, "They have taken advantage of us for so long."
"They devalue their currency like a ping-pong ball," he said.
Xi comes to Osaka with a more vulnerable economy behind him. The expansion in the world's second-largest economy continued to weaken in June, according to a Bloomberg Economics gauge of business conditions and market sentiment. In particular, the smaller-scale, private companies that form the backbone of the economy are seeing their outlook worsen.
The talks between the leaders of the world's two largest economies mark a critical juncture in their trade war, which has gone on for more than a year, and both sides have plenty to lose if it escalates.
No detailed trade deal is expected from the leaders' summit, a senior US administration official said Tuesday. The goal of the meeting is to create a path forward for a trade agreement, after negotiations broke down last month. That's when Trump decided to increase tariffs on $200 billion in Chinese imports, and threatened to target the remaining $300 billion with duties of as much as 25%.