President Donald Trump said he would pull out of the World Trade Organization if it doesn’t treat the U.S. better, continuing his criticism of a cornerstone of the international trading system.
“If they don’t shape up, I would withdraw from the WTO,” Trump said Thursday in an interview with Bloomberg News at the White House.
A U.S. withdrawal from the WTO would severely undermine the post-World War II multilateral trading system that the U.S. helped build.
Trump said last month that the U.S. is at a big disadvantage from being treated “very badly” by the WTO for many years and that the Geneva-based body needs to “change their ways.”
U.S. Trade Representative Robert Lighthizer has said allowing China into the WTO in 2001 was a mistake. He has long called for the U.S. to take a more aggressive approach to the WTO, arguing that it was incapable of dealing with a non-market economy such as China.
Lighthizer has accused the WTO dispute-settlement system of interfering with U.S. sovereignty, particularly on anti-dumping cases. The U.S. has been blocking the appointment of judges to the WTO’s appeals body, raising the possibility that it could cease to function in the coming years.
In the meantime, Trump also said that he wants to move ahead with a plan to impose tariffs on $200 billion in Chinese imports as soon as a public-comment period concludes next week, according to six people familiar with the matter.
Asked to confirm the plan in an interview with Bloomberg News in the Oval Office on Thursday, Trump smiled and said it was “not totally wrong.” He also criticized management of the yuan, saying China has devalued its currency in response to a recent slowdown in economic growth.
Companies and members of the public have until Sept. 6 to submit comments on the proposed duties, which cover everything from selfie sticks to semiconductors. The president plans to impose the tariffs once that deadline passes, according to the people familiar with the matter, who spoke on condition of anonymity because the discussions aren’t public.
Broadening the tariff battle would mark the most significant move yet in a months-long trade standoff and dent China’s growth prospects. Data released on Friday will allay some concerns over the near-term outlook as China’s official factory gauge unexpectedly strengthened this month following government measures to underpin demand.
“China is more prepared, mentally, this time than it was for the previous round of tariffs,” said Gai Xinzhe, an analyst at the Bank of China’s Institute of International Finance in Beijing. “The scale is enormous and once the tariffs materialize, they will definitely send jitters through financial markets.”
Such unease was already on display Friday as Asian stocks declined, following losses in the U.S., where the S&P 500 tested the key 2,900 level. Treasuries, the dollar and the yen held on to gains. The tariff news exacerbated already fragile market sentiment amid currency routs in Argentina and Turkey.