Trump threatens to call off US-China trade deal on Covid-19 fallout

US President Donald Trump is threatening to abandon a preliminary trade deal leading to an easing of trade tensions with China, citing the Covid-19 virus.

On April 30 Trump said a trade agreement signed in January between the United States and China was “secondary to what took place with the virus.”
And during an interview with Fox news on May 3, Trump laid the blame for the virus on the Chinese government, calling their handling of the early stages of the disease “a horrible mistake,” and threatened to walk away from the agreement.
In January, the US had agreed to pause the introduction of new tariffs on Chinese goods in exchange for China signing a deal containing a number of commitments, including $200 billion of new imports from the US.
The list of materials covered by this deal includes a number of minor metals and rare earths.
But it is unclear how China is going to meet the steep buying commitments involved in this preliminary trade deal, given the economic and logistic disruption caused by the Covid-19 outbreak.
The trade war between the US and China, which has run over the course of Trump’s presidency, has seen a series of tit for tat tariffs triggered by US attempts to cut down on steel imports.
The most significant effect on mineral markets was the introduction of a 25% tariff on a number of pigments, clays and minor metals.

William Clarke

william.clarke@fastmarkets.com

Published

William Clarke

May 05, 2020

17:28 GMT

London