President Trump claimed he has already struck “200 deals” on tariffs with foreign leaders — even as one of America’s biggest asset managers warned that a fall in trade between the US and China will lead to Covid-like shortages within weeks.
Apollo Global Management, which manages about $700 billion of assets, said analysis of China shipping data showed container traffic from there to the US is collapsing.
The consequence “will be empty shelves in US stores in a few weeks and Covid-like shortages for consumers and for firms using Chinese products as intermediate goods”, Torsten Slok, Apollo’s chief economist, said.
• Trump: I’ve made 200 tariff deals and spoken to President Xi
The White House claims that scores of trade deals are close to completion but has yet to release details of any. In an interview with Time magazine, Trump said that trade negotiations with foreign powers could be “finished” within “three to four weeks”.
“Ultimately, I’ve made all the deals,” Trump said in the interview to mark his first 100 days in office. “I’ve made 200 deals.”
Trump said that China’s President Xi had called him, despite China denying any contact between the two governments over the trade war between the economic superpowers. The president did not say when he and Xi spoke or what the two leaders discussed. “He’s called. And I don’t think that’s a sign of weakness on his behalf,” Trump said.
Trump has placed punitive 145 per cent tariffs on imports from China, while Beijing has retaliated with 125 per cent levies on US goods. “There’s a number at which they will feel comfortable,” Trump said, referring to China. “But you can’t let them make a trillion dollars on us.”
Explaining his approach to the tariff policy that has triggered weeks of turmoil on global markets, the president compared the US to the world’s department store.
“I am this giant store. It’s a giant, beautiful store, and everybody wants to go shopping there,” he said. “And on behalf of the American people, I own the store, and I set prices, and I’ll say, ‘If you want to shop here, this is what you have to pay.’ ”
The White House suspended tariffs on other countries for 90 days this month as foreign leaders vowed to negotiate with the Trump administration, but it has not spared China.
Xi and Trump in Beijing during the US president’s trip to China in 2017
THOMAS PETER/GETTY IMAGES
Vowing to “fight to the end”, Beijing has restricted exports of rare earth minerals that are vital for manufacturing batteries and high-tech devices.
Apollo warned that a collapse in trade between the US and China would lead to “significant lay-offs in trucking, logistics and retail” next month.
The White House has softened its posture towards China in recent days, claiming that trade talks with Beijing were moving the right direction. China dismissed the claim as “fake news”.
Markets were subdued on Friday. US equities rallied earlier in the week, with the S&P 500 on Thursday posting its third straight gain of more than 1 per cent and the Nasdaq its own third straight gain of more than 2 per cent.
