FRIDAY, AUGUST 2, 2019 The Boston Globe The Nation A
By Rachel Siegel
WASHINGTON POST
WASHINGTON — The
White House’s trade war with
China is hurting the US econ-
omy, President Trump’s for-
mer top economic adviser
said.
Gary Cohn, who left the ad-
ministration last year amid an
internal clash over Trump’s
protectionist trade policies,
told the BBC in a video posted
Thursday that the trade battle
was having a ‘‘dramatic im-
pact’’ on American manufac-
turing and that it offered a
‘‘convenient excuse’’ for China
to slow down its economy.
Cohn said the Chinese econo-
my ‘‘is driven by credit and
credit availability,’’ which is
determined by the central
government.
‘‘They can turn credit onand they can turn credit off,’’
Cohn said. ‘‘They needed to
slow down an overheated
economy where prices and
real estate prices and every-
thing were getting out of
hand. I think President Trump
provided that excuse for the
Chinese.’’
A former president of
Goldman Sachs, Cohn spent
much of his time as director of
the National Economic Coun-
cil pushing back against
Trump on global trade and his
influence gradually eroded.
Cohn embraced economic in-
ternationalism, while Trump,
who planned to impose tariffs
on steel and aluminum im-
ports at the time of Cohn’s de-
parture, doubled down on
economic nationalism.
Since leaving the White
House, Cohn hasn’t been shyabout criticizingTrump’spoli-
cies. In January, he called the
partial government shutdown
‘‘completely wrong’’ and said
he was ‘‘confused as to what
the White House’s strategy is
on this.’’
Trump, meanwhile, has at
times been contradictory in
his approach to China. This
week, he said a new trade deal
with Beijing might not hap-
pen until after the 2020 elec-
tion and that much hinged on
whether he was reelected.
Trump previously had pledged
that a major crackdown
against China was imminent.
Business leaders have be-
come increasingly concerned
about the lack of progress be-
tween the two economic su-
perpowers. In June, Trump
and Chinese President Xi Jin-
ping agreed to restart negotia-tions. But little momentum
has followed.
Cohn told the BBC that the
Chinese economy would have
slowed with or without the
trade war. But he agreed with
Trump’s moves to address Chi-
na’s theft of US intellectual
property and its attempts to
block American companies
from competing in Chinese
markets.
‘‘That has to be fixed,’’ he
said.
Cohn emphasized that ‘‘ev-
eryone loses in a trade war.’’
Constant uncertainty about
tariffs stops businesses from
investing, he said, and tariffs
drive up the cost of importing
crucial products from China,
negating the intended bene-
fits of Trump’s tax cuts. And
the US isn’t creating manufac-
turing jobs, he added.Ex-TrumpadvisersaystradewarishurtingUSeconomy
By Alan Rappeport
NEW YORK TIMES
WASHINGTON — President
Trump, frustrated by increas-
ingly fruitless negotiations with
China, said Thursday that the
United States would impose a
10 percent tariff on an addition-
al $300 billion worth of Chinese
imports next month, a signifi-
cant escalation in a trade war
that has dragged on for more
than a year.
The new tariff would come
on top of the 25 percent levy
that Trump has already im-
posed on $250 billion worth of
Chinese imports, resulting in
the United States taxing nearly
everything China sends to the
United States, from iPhones to
New Balance sneakers to chil-
dren’s books.
Trump had agreed in June
not to impose more tariffs after
meeting with Chinese President
Xi Jinping and agreeing to re-
start trade talks. But Trump
said he was moving ahead with
the levies as of Sept. 1 as pun-
ishment for China’s failure to
live up to its commitments, in-
cluding buying more American
agricultural products and stem-
mingtheflowoffentanylinto
the United States.
“Until such time as there is a
deal, we’ll be taxing them,”
Trump told reporters on the
White House lawn.
Trump’s move, which will
most likely be met with recipro-
cal punishment by China, in-
creases the likelihood that the
world’s two largest economies
will be locked in a protracted
trade dispute for months, if not
years. While the countries con-
tinue to negotiate, the path to a
deal has only narrowed as Bei-
jing and Washington harden
their positions and as political
dynamics, including the 2020
election, further complicate the
chances for a compromise.
The United States has insist-
ed that China buy more farm
goods and agree to cement cer-
tain changes into Chinese law.
Beijing has resisted codifying
any changes into law and has
said it will only enter into a deal
that is mutually beneficial.
Both sides seem increasingly
confident they can wait out the
trade war indefinitely.
On Thursday, Trump’s build-
ing frustration with the grind-
ing pace of the negotiations
boiled over.
“We thought we had a deal
with China three months ago,
but sadly, China decided to re-
negotiate the deal prior to sign-
ing,” Trump said on Twitter.
“More recently, China agreed to
buy agricultural product from
the US in large quantities, but
did not do so.”
The president said that Chi-
na also did not fulfill its com-
mitment to stop the sale of fen-
tanyl into the United States.
As he departed the White
House for a rally in Ohio,
Trump accused Xi of trying to
slow-walk negotiations aheadof the 2020 election in the
hopes that a Democrat would
win the White House.
“I think he wants to make a
deal, but frankly he’s not going
fast enough,” Trump said. “He
said he was going to be buying
from our farmers, he didn’t do
that. He said he was going to
stop fentanyl from coming into
our country, he didn’t do that.”
He added that the tariffs
could be raised to 25 percent or
higher if the talks continue to
falter, but allowed that they
could also be removed.
The stock market reacted
negatively to Trump’s com-
ments. The S&P 500 had been
up 1 percent shortly before 1
p.m., with strong gains seen
among technology companies
such as semiconductor makers.
But the market tumbled sharp-
ly after the threat to impose the
new tariffs appeared on Twitter.
The drop erased all the day’s
gains and more, sending the
benchmark stock index into the
red. Shortly before 2 p.m., the
S&P 500 was down about 1.percent. It closed down 0.9 per-
cent, led by drops in the energy
and financial sectors, both of
which fell more than 2 percent.
Oil prices, which are sensi-
tive to global growth concerns,
also fell sharply.
The decision came one day
after the president’s top advis-
ers returned from two days of
trade talks with their Chinesecounterparts in Shanghai.
There were few signs of real
progress, and both sides re-
leased perfunctory statements
when the meetings concluded,
saying there would be addition-
al discussions in Washington
next month.
Talks have been complicated
by the recent emergence of
Zhong Shan, China’s commerceminister, as a lead negotiator
for the Chinese, according to a
person familiar with the discus-
sions. Zhong’s role has signaled
to some in the Trump adminis-
tration that the hard-liners in
China are winning the debate
over the reformers, such as Vice
Premier Liu He, who are more
open to making structural eco-
nomic changes that the United
States wants.
After little of substance was
accomplished during the talks
in Shanghai this week, officials
in the Trump administration
grew increasingly wary that
China is retreating to its pattern
of using mixed messages and
delays to wait out Trump.
Before the talks even began,
Trump took to Twitter to berate
China for failing to buy Ameri-
can farm goods and to play
down the potential for a deal
before the election.
China has been preparing to
make agricultural purchases,
and on Sunday the state-run
Xinhua News Agency reported
that millions of tons of Ameri-
can soybeans had been shipped
to China. But elsewhere, Chi-
nese officials have continued to
insist that they are not making
purchases as a condition of the
talks. On Wednesday, Xinhua
characterized China’s agree-
ment to buy more American
farm products as being “accord-
ing to its own domestic needs
and favorable conditions.”Trump sets new 10 percent tariff on more Chinese goods
Says Beijing not
buying enough
US farm products
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