President Donald Trump warned on Thursday the U.S. had the option to separate from China’s deeply intertwined economy, despite the powers’ pledges to move forward on a trade deal.
Tensions have been mounting between Beijing and Washington on a number of fronts including trade, although the two sides signed a “phase one” deal earlier this year to bring a truce to a bruising trade war.
The U.S. “certainly does maintain a policy option, under various conditions, of a complete decoupling from China. Thank you!” Mr. Trump tweeted.
Trade talks
The U.S. President wrote that he was responding to comments by his Trade Representative Robert Lighthizer, who has been at the forefront of trade negotiations with Beijing.
Mr. Lighthizer told a congressional committee this week that China so far has been living up to the terms of a “phase one” agreement that eased the dispute, but that decoupling the two economic giants was now impossible.
“That was a policy option years ago, but I don’t think it’s a policy or reasonable policy option at this point,” Mr. Lighthizer said.
Mr. Lighthizer described himself as a hardliner on China policy, and outlined the Trump administration's plans to “reset” the World Trade Organization, largely so that it can better rein in Beijing’s policies, which he says run afoul of free trade rules.
But his admission that the world’s two largest economies are inextricably linked — despite Mr. Trump’s aggressive campaign to push American firms to relocate production to the U.S. — caused some angst in Republican circles.
On Friday, Chinese Foreign Ministry spokesman Zhao Lijian told a regular press briefing that “trying to artificially cut global industrial and supply chains, and using political power to change the laws of the economy, is neither realistic nor wise”. “This cannot solve the U.S.’s problems and will only cause ordinary Americans more harm,” he added.
Secretary of State Mike Pompeo said a senior Chinese official also confirmed to him Beijing’s commitment to phase one, which includes China stepping up purchases of U.S. products.
Mr. Pompeo met Wednesday in Hawaii with Yang Jiechi, a veteran maker of Chinese foreign policy, in Hawaii to discuss soaring tensions.
Pompeo’s warning
Mr. Pompeo on Friday warned Europeans that they are abandoning democracy if they embrace China, in a scathing denunciation of Beijing two days after he held talks on trans-Pacific friction.
In his speech, Mr. Pompeo indicated that his meeting with Mr. Yang did little to change his hawkish views on China, which he called a “rogue actor” on the world stage. He renewed calls on Europeans to shun Chinese telecom giant Huawei, which he called the arm of the communist “surveillance state,” and said Beijing was “flagrantly attacking sovereignty” through its port investments in Greece and Spain.