Trump expects China to bend first on tariff fight

US President Donald Trump is predicting China will quickly remove its trade barriers because “it’s the right thing to do.”

The Trump administration proposed new $US100 billion tariffs on Chinese goods late last week, tripling the severity of the first set of $US50b in tariffs in March. While no new US tariffs are yet in force, China’s Ministry of Commerce says it is working on “comprehensive countermeasures” and is “not afraid to fight a trade war” with the US.

However, on Sunday the US president tweeted that “China will take down its trade barriers because it is the right thing to do. Taxes will become reciprocal and a deal will be made on intellectual property.”

He closed the tweet saying he and Chinese leader Xi Jinping will always be friends and that there is a “great future for both countries.”

In addition to the new tariffs on a broad set of Chinese goods, the Trump administration is also mulling the use of an emergency act to impose the same investment restrictions against Chinese businesses that apply to Americans in China.

The president’s top economic adviser says the two countries are holding back-channel discussions to nip a potential escalation of tariffs. China denies such talks are taking place.

The barbs continue to worry global markets. The latest sign of concern comes from a flurry of US soybean purchases by European buyers.

The US Department of Agriculture confirmed 458,000 tonnes of US soybeans were sold to undisclosed destinations, suspected to be Germany and the Netherlands, according to Reuters. If true, the sale will be the largest one-off purchase by the European Union in 15 years.

At the end of last week, the S&P 500 Index finished down 2.2% while all 30 members of the Dow Jones Industrial Average retreated. The Nasdaq Composite Index slid 2.3% and the Dow lost 2.3%.

Mr Xi is expected to give a speech to the Boao Forum for Asia tomorrow, in which China’s planned policies of economic liberalisation may be outlined.

Reports that China’s foreign currency rose from $US8.34 billion to $US3.143 trillion in March will give Mr Xi a much-needed boost of confidence heading into the address. The lift is the first time China’s reserves have increased in 13 months.

Upcoming this week
Also set for this week, Italian President Sergio Mattarella is expected to guide another round of consultations among political parties in an attempt to form a government.

In the UK, British Prime Minister Theresa May will discuss Brexit with Danish Prime Minister Lars Lokke Rasmussen and Swedish Prime Minister Stefan Lofven on April 9.

In the US, April 11 is the day Facebook chief executive Mark Zuckerberg will testify to Congress over the company's data privacy practices and John Bolton will take over as the White House’s national security adviser on April 9.

In Asia, North Korean Foreign Minister Ri Yong Ho will meet with Russian Foreign Minister Sergei Lavrov in Moscow on April 10. North Korea will also celebrate the Day of the Sun on April 12 – recognising the birthday of founder Kim Il Sung.