Trump, at G7 Summit, Walks Back Threats to China and Talks of Japan Trade Deal

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President Trump backed off a threat to escalate his trade war with China, admitting to “second thoughts,” just two days after he ordered American companies out of the country in Twitter statements that sent global markets reeling.

In comments to reporters ahead of a breakfast with Boris Johnson, the British prime minister, the president said that he had “no plans right now” to use the International Emergency Economic Powers Act of 1977 to force businesses to leave China as punishment for the country’s trade practices.

“Well, I have the right to. If I want, I could declare a national emergency,” Mr. Trump said at the beginning of a day of consultations with world leaders at the Group of 7 summit in Biarritz, France.

But he added: “Actually we’re getting along very well with China right now. We’re talking. I think they want to make a deal much more than I do.”

The tone from Mr. Trump represented an abrupt turn from his more ominous and threatening statements, including a tweet that American companies were “hereby ordered to immediately start looking for an alternative to China.”

In a series of later tweets, Mr. Trump responded to China’s trade retaliations by further escalating tariffs on Chinese goods.

In France on Sunday, when Mr. Trump was asked whether he was having second thoughts about his aggressive posture with China, he said, “Yeah, sure, why not?” But he offered no further explanation about what policy positions he might reconsider.

“Might as well. Might as well,” he said. “I have second thoughts about everything.”

President Trump on Sunday called the new British prime minister, Boris Johnson, “the right man” to deliver Brexit, and talked up prospects of supporting the project by striking with Britain a “very big trade deal, bigger than we’ve ever had.”

The comments followed a breakfast between the two leaders and their advisers, their first face-to-face meeting since Mr. Johnson became prime minister last month.

Mr. Johnson has said he wants to negotiate a deal with the European Union by Oct. 31, when Britain is scheduled to withdraw, but he has also promised to deliver Brexit on that date, with or without an agreement.

Mr. Johnson is trying to strike a tricky balance between the bloc and Mr. Trump, a Brexit supporter and critic of European Union trade policies. The prime minister needs a favorable trade agreement with the United States to cushion economic losses from loosening ties to the European Union, Britain’s biggest trade partner.

What such a deal would achieve, or when, remains anyone’s guess. And Sunday’s encounter with Mr. Trump, who is unpopular with many Britons, illustrated that, for domestic political reasons, Mr. Johnson has to tread carefully.

British critics fear that a trade deal with the U.S. could harm the National Health Service by forcing it to pay more for pharmaceuticals, and allow the import of food held to lower standards than in Europe.

Mr. Johnson said that he had explained these objections to the president, and suggested that there would be “tough talks ahead.”

The prime minister will also meet in Biarritz with Donald Tusk, the head of the European Council, to discuss Brexit.

“I still hope that Prime Minister Johnson will not like to go down in history as Mr. No Deal,” Mr. Tusk said.

President Trump teased a breakthrough in talks with Japan on Sunday morning, saying that the United States was “very close” to a major trade deal.

“We’re working on a very big deal with Japan and we’re very close to getting it,” he told reporters. “It will be one of the biggest deals we’ve ever made with Japan.”

He offered no further details, though reports in Japan suggested that negotiators had reached agreement on a plan that would avoid Mr. Trump’s threats to increase tariffs on Japanese autos.

Later, at the start of a face-to-face meeting with Prime Minister Shinzo Abe of Japan, Mr. Trump referred again to a trade pact, and suggested that he and Mr. Abe could make enough progress in their discussions to finalize the arrangement.

“We’ll possibly know by the end of this meeting,” he said.

Earlier in the day, Mr. Trump credited his own relationship with Mr. Abe for the emerging deal.

“As you know,” he said, “Prime Minister Abe and I are very good friends, really good friends.”

Mr. Trump has once again ruffled feathers in Brussels and beyond, by suggesting that Russia be invited back into what used to be known as the Group of 8.

Russia was suspended in 2014 after it seized Crimea from Ukraine and supported militias trying to break parts of eastern Ukraine away from the country.

Mr. Trump said last week that he thought bringing Moscow back into the fold would be “appropriate,” drawing quick rebuffs from European members France, Germany and Britain.

Administration officials downplayed the issue, noting that Russia had not asked to rejoin the club. But on Sunday, Mr. Trump said the United States, as the host of next year’s meeting, might invite Russia to participate.

At last year’s G7 meeting, the president said Russia should be invited back, and even stated that its annexation of Ukraine was partly justified — a position roundly rejected by major allies of the United States.

“Under no condition can we agree with this logic,” Donald Tusk, president of the European Council, said on Saturday. “The reasons why Russia was disinvited in 2014 are still valid.”

When Russia was admitted to the group in the late 1990s, “it was believed that it would pursue the path of liberal democracy, rule of law and human rights,” Mr. Tusk said. “Is there anyone among us who can say with full conviction, not out of business calculation, that Russia is on that path?”

European Union officials have noted that there are other international forums for Russia, like the Group of 20, that include countries like China and Saudi Arabia that are not democracies.

Amid fears of an impending recession that could jeopardize his re-election next year, President Trump’s focus at the G7 meeting will be economic, with particular attention on his clash with China.

But this weekend, Mr. Trump’s advisers have accused President Emmanuel Macron of France, the host of the meeting, of focusing too much on “politically correct bromides” and “niche issues” like global warming and inequality, rather than economic growth.

They also complained about a tax France recently imposed on tech giants like Facebook and Google.

Mr. Trump, who has waged an escalating trade war with Beijing, has talked about cutting off trade with China and forcing American companies to stop operating there — extraordinary threats that have sent shock waves through world markets.

In briefing reporters before his trip, senior administration officials cited barriers to trade and foreign investment, and “currency stability” as being among the concerns he will raise at the summit meeting — concerns that, for Mr. Trump, inevitably lead back to China.

The administration officials specifically cited China’s industrial subsidies, direct government involvement in directing businesses, rules requiring companies to surrender technological secrets in order to enter the Chinese market, and intellectual property theft

They also cited reform of the World Trade Organization, a recent target of the president’s ire. In particular, he has criticized its trade rules that favor developing countries, which include China, though it now has the world’s second-largest economy.

After President Trump’s angry, protocol-breaking treatment of the last G7 summit meeting, the organizers this time have tried to take fewer chances.

At the June 2018 meeting in Canada, Mr. Trump clashed with the other leaders in assailing trade agreements, defending protectionist tariffs and arguing that Russia, which was expelled from the group after seizing territory from Ukraine in 2014, should be allowed back in.

Mr. Trump left that meeting early, and refused to sign a final communiqué when it made reference to the “rules-based international order.” Aboard his plane, he criticized the host, Prime Minister Justin Trudeau, for comments at the closing news conference, calling him “meek and mild” and “dishonest and weak.”

President Emmanuel Macron of France, the host of this year’s meeting in Biarritz, who had a one-on-one lunch with Mr. Trump on Saturday, decided early on that there would be no final communiqué.

“No one reads the communiqués,” which are drafted in advance, Mr. Macron told reporters last week. Reaching agreement on the wording constrains debate, and he wants it to flow freely, he said.

In a series of early-morning tweets from his hotel room on Sunday, Mr. Trump blamed the “the Fake and Disgusting News” for predicting that this year’s gathering would end in disaster.

In fact, he insisted, “we are having very good meetings, the Leaders are getting along very well.”

On trade and other matters, Mr. Trump has upended the assumption that the member countries — highly developed democracies with some of the world’s largest economies — would have broadly compatible views.

President Trump kicked off what is likely to be a tense day at the summit meeting with some jovial backslapping on Sunday as he met Boris Johnson, the new British prime minister, for breakfast, though disagreements between them were still apparent.

When Mr. Trump declared, “he’s the right man for the job,” Mr. Johnson quipped, “He’s on message there.”

But when Mr. Trump insisted that none of his counterparts had questioned his China trade war at an opening dinner Saturday night, Mr. Johnson interrupted the president to do just that. He praised Mr. Trump for his handling of the American economy but questioned the wisdom of embracing protectionism, tariffs and global confrontation over trade.

“We’re in favor of trade peace on the whole,” Mr. Johnson said, in a mild-mannered rebuke to Mr. Trump’s aggressive trade posture with allies and adversaries alike.

“We think that on the whole, the U.K. has profited massively in the last 200 years from free trade and that’s what we want to see,” he said, adding, “we don’t like tariffs on the whole.”

Mr. Trump offered a quick retort to the prime minister, asking how Britain was doing “the last three years,” a reference to its recent economic stagnation.

After a year of sometimes violent Yellow Vest protests, and accusations of police brutality, the French authorities, wanting to take no chances with the summit meeting, have deployed more than 13,000 security personnel to Biarritz.

Meetings among world leaders tend to attract crowds of demonstrators, and the handling of security is widely seen as a test for the French interior minister, Christophe Castaner, and for President Emmanuel Macron.

“We will not tolerate any excesses,” Mr. Castaner said last week as he reviewed the security arrangements in Biarritz. “If they occur, we will respond.”

There were some clashes on Saturday, with security forces using water cannons and tear gas to disperse protesters.

Ordinarily, Biarritz is a small, elegant seaside resort known for good surfing, but it now resembles a nearly impenetrable armed camp.

The local airport and train stations have been shut down for the duration of the summit, there is a no-fly zone overhead, boats are banned or heavily restricted along parts of the coastline, and several roads leading to the heart of the town have been closed. Cars are barred from the beachfront area where world leaders are staying, and access to the city center is strictly controlled, even for local residents.

August is peak tourist season, and store and restaurant owners worry that business will suffer, though French officials insist that the legions of officials and journalists descending on Biarritz will make up for any loss of tourists. As the summit meeting approached, local merchants witnessed the unusual sights of empty cafes, quiet streets and calm beaches.

Reporting was contributed by Michael Shear and Peter Baker from Biarritz, France; Steven Erlanger and Matina Stevis-Gridneff from Brussels; Aurelien Breeden from Paris; and Richard Pérez-Peña and Stephen Castle from London.

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