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Trump begins talks on trade in Japan on eve of G-20 summit

OSAKA — U.S. President Donald Trump took aim Thursday at Japan and other allies with their “massive” goods trade surplus with the United States and their dependence on Washington for defense, as he started a three-day trip to Osaka.

 

“I’ve inherited massive trade deficits with our allies and we even help our allies militarily,” Trump said in a dinner with Australian Prime Minister Scott Morrison on the eve of a Group of 20 summit in the western Japan city.

 

Trump made the remark a day after calling the United States’ security treaty with Japan unfair, a sign that he may touch on the issue in a meeting Friday with Prime Minister Shinzo Abe on the margins of the two-day summit.

 

The comments were taken as suggesting Trump could use a threat to potentially scrap the longtime treaty as leverage to extract concessions from Japan during ongoing negotiations for a bilateral trade agreement.

 

Referring to a meeting Saturday between Trump and Chinese President Xi Jinping, the South China Morning Post reported the two governments have agreed to a tentative cease-fire in their trade war ahead of the bilateral summit.

 

Details of the agreement — which would suspend U.S. tariffs on an additional $300 billion of Chinese products — are being laid out in press releases in advance of the Trump-Xi meeting, the paper said Thursday, citing three sources in Beijing and Washington.

 

With the tit-for-tat U.S.-China tariff war roiling financial markets and impacting global growth, analysts are closely watching whether Trump and Xi can avoid a further escalation of the dispute as they hold face-to-face talks.

 

Quoting one source with knowledge of the planning, the Hong Kong paper said Trump’s decision to delay additional tariffs was Xi’s price for having the meeting in Osaka.

 

It is unclear whether Trump will give any sort of deadline for the talks to reach an agreement, as he had before. Two sources suggested a deadline would be set at the end of the year, according to the paper.

 

A senior U.S. administration official suggested Tuesday that Trump and Xi may agree to relaunch trade negotiations, a scenario similar to that which the leaders reached in their last meeting in December in Argentina.

 

Under this scenario, the two sides’ existing tariffs and counter-duties on many of each other’s goods would stay in place. But no additional import taxes would take effect as a goodwill gesture to get the talks rolling.

 

Despite the December truce, U.S.-China talks broke down in May and the two sides slapped additional tariffs on each other. Trump has now threatened to impose levies of up to 25 percent on an additional $300 billion of Chinese products, a move that would extend U.S. tariffs to nearly everything China ships to the United States.

 

In a meeting with Abe on Friday, Trump is expected to demand that Japan cut tariffs on American agricultural products as part of a trade deal, as he endeavors to appease impacted farmers in the lead-up to campaigning for his 2020 re-election bid.

 

In remarks similar to what he asserted in the 2016 presidential campaign, Trump said Wednesday on Fox Business Network, “If Japan is attacked, we will fight World War III. We will go in and protect them with our lives and with our treasure.”

 

“But if we’re attacked, Japan doesn’t have to help us at all. They can watch it on a Sony television,” he said.

 

The security pact requires the United States to come to the defense of Japan in the event of an attack, and allows Washington to station troops at bases hosted by its principal ally in Asia.

 

Besides Xi and Abe, Trump plans to meet bilaterally on the G-20 sidelines with Russian President Vladimir Putin, German Chancellor Angela Merkel and other counterparts on North Korea, Iran and other pressing issues.

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