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Trump keeps up rhetoric but may still heed advice on China trade

President Trump had a chance on Tuesday to hear arguments from both sides of the aisle regarding the US-China trade relationship, as his administration weighs long-awaited decisions on trade investigations.

During a bipartisan meeting with lawmakers at the White House, despite warnings from members of Congress against rash trade actions, Trump stood by his previous statements on the issue. Regarding tariffs and/or import quotas, the president was confident that other countries would take it without hitting back, and that price increases for US consumers would not be a problem.

“And it’s possible you won’t be creating — you won’t be having much of a problem in terms of pricing because I actually think a lot of the countries will eat it because they want to continue to export,” Trump said during the meeting.

He also gave the United States the credit for the economic success of Asian countries.

“We have rebuilt China. We have rebuilt a lot of — with the money they’ve taken out of the United States. We are like the piggy bank that had people running it that didn’t know what the hell they were doing. We have rebuilt countries massively. You look at some of these countries, look at South Korea, Japan, so many countries, and then we defend them on top of everything else.”

Lawmakers, as Politico reports, tried to temper Trump’s aggressive posture on the issue – particularly members of his own party.

Senator Pat Toomey (R-Pa) was quoted as pressing Trump to move “very, very cautiously” on trade issues, only targeting countries that engage in unfair practices. “That’s all countries,” Trump retorted.

But House Ways and Means Chairman Kevin Brady said after the meeting that Trump “was listening very carefully.”

“I made the case that 232 [steel import investigation] is sort of like old-fashioned chemotherapy,” Brady said. “It’s not used very often because it can do as much damage as it can good.”

One report on Tuesday indicated that pending trade actions are currently bogged down in legal questions. Administration officials are divided on what measures to take in the Section 301 investigation on forced technology transfer and IP theft, The Financial Times reported, citing sources familiar with the matter. One potential option, invoking the International Emergency Economic Powers Act, which is typically used in the case of sanctions, could lead to legal challenges from US companies.

In addition to a visit from Chinese State Councilor Yang Jiechi to Washington last week, China has been stepping up communication with the administration through the US ambassador in Beijing, Terry Branstad. The envoy has met privately with Chinese President Xi Jinping, as well as Wang Qishan, according to four sources. Xi’s top economic advisor, Liu He, is said to be meeting with Branstad on Wednesday.

China anounced during Yang’s visit that the US agreed to jump-start a moribund bilateral trade dialogue, that a Trump official declared dead last year.

Chinese state media has consistently reported that US-China relations have improved under the Trump presidency, to the bewilderment of many in Washington who note that Trump’s stated policy positions are significantly more hawkish than previous administrations on a range of issues. Though the White House has quieted criticisms of China’s domestic human rights record, Trump’s talk of trade action, as well as recently released national security and defense policy documents reflect a broader trend in Washington policy circles towards greater confrontation with China.

Last year, Trump’s rhetoric on confronting China on trade issues proved to be mostly talk, and while he has been promising concrete actions are coming soon, one school of thought maintains that any action will be token in nature. Some see the recently enacted tariffs on washing machines and solar panels, largely more benign than expected, as evidence of this.

Nonetheless, recent efforts by leaders in Beijing to keep the relationship on the up-and-up show that China is taking notice of Trump’s threats. Some have suggested that Trump’s aggressive negotiating tactics have in the case of North Korea delivered results.

Head of Eurasia Group Ian Bremmer has been consistently critical of Trump, but has insisted that the president deserves credit for getting China to sign on to North Korea sanctions. He went so far as to say over the summer that China’s implementation of sanctions would be “a bigger win on N Korea nuke/missile issue than any previous administration.”

It has been argued that the Trump administration’s threats of a preemptive military strike, should other pressure fail to succeed, is as much a bargaining position with Beijing to step up sanctions as it is with Pyongyang to negotiate. If this is any example of Trump’s negotiating style, the world may have reason not to expect the worst from this administration’s trade threats. But whether he can be as successful on this issue as some say he was in his approach to North Korea is yet to be seen.

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