President Trump is complicating negotiations with China and the European Union as he made two moves Wednesday to call out Chinese President Xi Jinping on social media and boost tariffs on steel and aluminum.
Talks with China are on hold waiting for a call between the two leaders, which the White House maintains will happen soon. But a 2:17 am ET Truth Social missive from the president charged that dealing with Xi is “extremely hard.”
It was a message that immediately raised questions about the timing of a chat that Beijing says it's in no rush to have — and how much will be accomplished when it eventually takes place.
There are parallels in the situation with the European Union, a bloc that is the top trading partner of the U.S.
Trump offered his own surprise there last week with a plan to increase existing tariffs on steel and aluminum imports to 50% from 25%. They went into effect at 12:01 am ET on Wednesday.
It's a move that hits a variety of trading partners with Europe in particular outraged by the move and promising additional countermeasures as the two sides met for talks in Paris this week.
US Trade Representative Jamieson Greer traveled to Paris this week for a meeting with European Trade Commissioner Maroš Šefčovič.
He described those talks in a statement Wednesday as “advancing quickly” and “very constructive” but appears set to be heading home with few concrete signs of a deal anytime soon.
All in all, the developments this week across three continents are a sign that trade tensions could perhaps be in for a rise this summer after weeks of talk around the notion that markets may be calmed by a TACO (“Trump Always Chickens Out”) trade.
As Terry Haines of Pangea Policy put it in a recent note: “TACO is the latest triumph of misplaced markets…as quickly as TACO rose, events rose up to smite it.”
Days of promises for a call between Trump and Xi — who apparently have not spoken since before Trump's inauguration — have passed without even the scheduling of the conversation.
The frustration appeared to boil over for Trump overnight when he posted that “I like President XI of China, always have, and always will, but he is VERY TOUGH, AND EXTREMELY HARD TO MAKE A DEAL WITH!!!”
It raised questions about the forthcoming call as well as the status of a trade truce between the US and China that was reached in May to delay tariffs by 115 percentage points for 90 days.
That's a pact that has looked increasingly fragile with both sides charging that the other is cheating in recent days and significant unresolved issues looming from critical minerals to semiconductors.
