- The Washington Times - Monday, November 11, 2019

Wall Street investors, U.S. farmers and Chinese officials will be among those listening closely to President Trump’s speech at the Economic Club of New York on Tuesday for signs of whether he intends to make concessions to Chinese demands for a rollback of tariffs.

The White House sent mixed signals about China’s announcement last week that the two countries had agreed to an easing of tariffs in their 16-month-old trade war, but Secretary of State Mike Pompeo said Monday that the talks are creating reason for optimism.

“We’ve made real progress,” Mr. Pompeo told WCSC-TV in South Carolina. “I hope we get the first part of the deal done with China in the next handful of weeks.”

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Mr. Trump said over the weekend that negotiations were moving along “very nicely” but dismissed reports that he has agreed to lift tariffs on Chinese products by a certain level.

“The reports were incorrect. If it’s not a great deal, I won’t make it,” the president told reporters. “China very much wants to make a deal. They’re having the worst year they’ve had in 57 years. Their supply chain is all broken, like an egg.”

A White House official said Mr. Trump will address trade with China in his speech but didn’t divulge details.

Amid the conflicting reports of mutual tariff relief, Zoom Telephonics Inc., a producer of cable modems and other communication products, said Monday that the Office of the U.S. Trade Representative denied the last of the company’s requests for tariff exemptions for its products made in China. The company said it plans to transfer manufacturing of the vast majority of its products out of China and mostly to Vietnam.

“This news is not surprising, but it is very disappointing due to the severe harm we’ve been experiencing from the China tariffs, which have dramatically impacted our profits, cash flow, allocation of human resources and stock price,” said Zoom CEO and Chairman Frank Manning. “We wish we could provide insight into this USTR decision, but we can’t do that now or possibly ever because we simply don’t understand their decision-making in spite of significant efforts. We have been working hard to move most of our production out of China, and that work will continue.”

China is experiencing its slowest economic growth in three decades while the U.S. economy is growing at a healthy rate. Although agriculture has been hit hard and manufacturing has slowed, employers have been adding jobs at a solid pace and have reported strong earnings in the third quarter.

The economy added 128,000 jobs in October, and the government said the number of workers added in August and September increased 31% over earlier estimates.

The stock market hit record highs again last week. The Dow Jones Industrial Average turned positive Monday on news that Boeing expects to resume deliveries next month of its beleaguered 737 Max jet. The S&P 500 and the tech-heavy Nasdaq indexes were down slightly.

“When you consider the negative impact that the GM strike had on the October numbers, it is clear that the labor market is stronger than we perceived,” economist Joel Naroff of Naroff Economic Advisers said in his latest note.

He said the October jobs report “makes it awfully hard” for the Federal Reserve to cut interest rates again at its December meeting. Fed Chairman Jerome Powell is scheduled to speak Wednesday to the Joint Economic Committee in Congress and meet Thursday with the House Budget Committee.

Still, the impact of the tariffs on farmers is a particular worry. The federal government has approved two farm bailouts totaling $26 billion, and some in Washington expect a third.

Democratic presidential front-runner Joseph R. Biden said in a Twitter post that the president’s trade war “is reckless, and hurting our farmers every day.”

The White House is pressuring congressional Democrats publicly to take up the U.S.-Mexico-Canada trade agreement, although House Speaker Nancy Pelosi, California Democrat, hasn’t committed to it. Democrats have sought to put their stamp on labor, environmental and enforcement terms.

Manufacturing output contracted for the third straight month in October, with significant job losses in that sector in the 2020 battleground states of Pennsylvania, Michigan and Wisconsin.

The president had raised expectations of signing “phase one” of a trade agreement with China at a summit this weekend in Santiago, Chile. But the president of Chile backed out as host because of civil unrest in his country, and the U.S. has been looking for other suitable sites for Mr. Trump to sign an agreement with Chinese President Xi Jinping.

Meanwhile, the White House has until Wednesday to decide whether to impose tariffs on European and Asian auto imports.

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