Trump: China trade deal likely; carmakers can avoid tariffs with U.S. plants

[March 22, 2019]   WASHINGTON (Reuters) - U.S. President Donald Trump said trade negotiations with China were progressing and a final agreement "will probably happen," adding that his call for tariffs to remain on Chinese imported good for some time did not mean talks were in trouble.

Trump, in a television interview aired on Friday, also said he expected to keep a 25 percent tariff on European light trucks amid separate ongoing trade talks with the European Union, but that companies could avoid it by building factories in the United States.

The Trump administration is engaged in ongoing trade talks with both the European Union and China as part of the Republican president's "America First" agenda. Top U.S. officials are headed to Beijing in coming days amid a possible Trump summit with Chinese President Xi Jinping to seal any final deal.

"Our deal is coming along very well. We'll see what happens," Trump told Fox Business Network regarding China. "I think the deal will probably happen. I think they need it very badly."

Asked about his remarks earlier this week about U.S. tariffs on Chinese goods staying in place for a period of time and whether that meant there was a snag in the negotiations, Trump said, "No, not at all."

Trump then segued to the European auto sector. "We get a 25 percent tariff on that segment - that's our best segment by far. And yes, we will absolutely be able to keep it - not only keep it going, I really think we have tremendous potential," he told the network in the interview, which was taped on Thursday.

U.S. and Chinese flags are seen before Defense Secretary James Mattis welcomes Chinese Minister of National Defense Gen. Wei Fenghe to the Pentagon in Arlington, Virginia, U.S., November 9, 2018. REUTERS/Yuri Gripas

"I’ll tell you what the end game is. They’ll build their plants in the United States and they have no tariffs," Trump added. Then, asked if he would agree to zero tariffs, he said: "I would do it for certain products, but I wouldn’t do it for cars."

The United States in July agreed not to hit EU car imports with extra tariffs while the Washington and Brussels sought to improve economic ties, but the U.S. ambassador to the EU on Thursday said Europe was falling short in trade talks.

The U.S. Commerce Department has given the White House a report regarding the legal basis to impose steep tariffs on cars on national security grounds.

Asked if autos and auto parts posed a security risk, Trump said: "well, no."

"What poses a national security risk is our balance sheet. We have to have -- we need a strong balance sheet. Otherwise you don’t have national security," Trump added. "We’re straightening it out."

(Reporting by Susan Heavey; Editing by Hugh Lawson and Chizu Nomiyama)

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