President Trump is complicating negotiations with China and the European Union, making 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 a.m. 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 US.
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 a.m. 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 meet for talks in Paris this week.
Donald Trump at the White House on May 30. (Celal Gunes/Anadolu via Getty Images) ·Anadolu via Getty Images
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.
Read more: The latest news and updates on Trump’s tariffs
As Terry Haines of Pangaea 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 a conversation even being scheduled.
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.
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Read more: What Trump’s tariffs mean for the economy and your wallet
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.
Trump and his team are charging that China has already violated the 90-day truce by not loosening trade restrictions for critical minerals, which are the building blocks in everything from computers to electric vehicle batteries to jet engines to medical devices.
The Chinese Ministry of Commerce has denied the claims and accused the US of its own actions to undermine the deal.
For now, top Trump aides say their communication with the Chinese is on hold until the two leaders speak, but Beijing appears to be in no hurry to schedule the call.
Chinese state media focused Wednesday on other trade talks with “true friends and good partners,” such as a meeting Wednesday between Xi and the president of Belarus.
Asked about a potential call with the US Tuesday, a spokesperson for China’s Foreign Ministry offered only, “I have no information to share on that.”
In this photo released by Xinhua News Agency, Chinese President Xi Jinping, right, meets with Belarusian President Alexander Lukashenko in Beijing on June 4. (Huang Jingwen/Xinhua via AP) ·ASSOCIATED PRESS
The European talks this week also got underway with plenty of fanfare but appear to have ended with little clarity on how the array of issues on the table will be resolved.
Greer’s statement on Wednesday offered only that “I look forward to continued constructive engagement in the coming days and weeks.”
Negotiators are confronting issues on everything from Europe’s value-added tax (VAT) to restrictions on US tech companies and agriculture purchases, in addition to the overall tariff issues.
That’s in addition to the new steel duties that went into effect Wednesday and doubled rate on the European Union, but with a last-minute exemption for the United Kingdom, where duties will remain at 25%.
All in all, few see a path toward even a limited deal between the US and Europe before a deadline of July 8, when Trump is pledging to implement his delayed reciprocal tariffs, including promised 50% duties on the European Union.
And Trump’s two fronts — Europe and China — could even end up working against him, especially with Bloomberg reporting Wednesday that China is considering placing an order for hundreds of aircraft from the French-owned Airbus, perhaps tied to a visit next month of European leaders to Beijing.
If that deal comes to pass, it could be a major blow to Trump — not to mention Boeing (BA).
Meanwhile, the Trump administration continued to tout his tariff plans, with Commerce Secretary Howard Lutnick boasting to the Senate during an appearance Wednesday that “the Trump administration is imposing tariffs and ending loopholes.”
Lutnick also offered a new nugget during his testimony Wednesday, saying new tariffs on airplane parts could be announced by the end of the month.
“The key is to protect our industry,” he said.
Ben Werschkul is a Washington correspondent for Yahoo Finance.
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