US' $344 bn trade deficit with China 'not sustainable', Trump warns Xi

The US president during his election campaign threatened to impose tariffs of up to 45% on Chinese products

President Donald Trump warned his Chinese counterpart, Xi Jinping, that Washington's trade deficit with China "has continued to grow" and that the situation "is not sustainable," the White House said on Tuesday.

Trump and Xi spoke by telephone late on Monday in Washington, when it was already Tuesday morning in Beijing, and also discussed diplomatic progress on the Korean peninsula, Efe reported.

"President Trump expressed disappointment that the United States' trade deficit with China has continued to grow. President Trump made clear that the situation is not sustainable," said the White House in a statement after the call.

The US trade deficit with China increased by 13 per cent in 2017, the first year of Trump's presidency, to 1.87 trillion yuan ($288 billion), according to official figures released last Friday in Beijing.

Meanwhile, the US Department of Commerce reported in early January that the negative trade balance between the US and China totalled $344.4 billion between January-November 2017, with figures for December still being unavailable at the time.

Trump considers the trade deficit to be a sign of economic weakness and has blamed it on the existing trade agreements with other countries that, in his judgment, are the root cause of job losses in the US manufacturing sector.

The US president during his election campaign threatened to impose tariffs of up to 45 per cent on Chinese products and to declare China to be a currency manipulator, but for the moment he has not taken any action on those two issues, believing that first he must develop a closer working relationship with Xi to resolve the crisis involving North Korea.

In their telephone conversation, Trump and Xi "acknowledged the resumption of inter-Korean dialogue and expressed hope that it might prompt a change in North Korea's destructive behaviour," the White House said.

"President Trump committed to sustain the United States-led global campaign of maximum pressure to compel North Korea to commit to denuclearisation," the White House added.

According to the official Chinese press, Xi insisted during the call that all parties must join efforts to capitalise on advances on the Korean peninsula and create the conditions for resuming diplomatic negotiations.

Regarding trade, Xi emphasized that economic and trade cooperation between Washington and Beijing has provided concrete benefits for both parties, and thus constructive methods should be used to resolve bilateral differences in this area via greater opening of both markets, according to the Chinese version of the call.