The US wants trade wins against China, but that’s not Trump’s ‘key priority’

Jason Lee | Reuters

China’s President Xi Jinping claps after his speech as he and other new Politburo Standing Committee members meet with the press at the Great Hall of the People in Beijing, China October 25, 2017.

Trade tensions between the world’s two largest economies are hot ahead of President Donald Trump’s visit to Beijing, with the American leader calling the U.S. trade deficit with China “embarrassing” and “horrible” last week.

The comments follow trade-related disputes in recent weeks, highlighting friction between the two economic giants as they prepare to go to the negotiating table. There’s just one problem: North Korea.

“The key priority for the U.S. is to maintain good economic relations with China since the U.S. wants to strengthen joint co-operation with China to tackle the key geopolitical threat from North Korea’s aggressive development of its nuclear weapons and ballistic missiles program,” Rajiv Biswas, chief economist for Asia Pacific at IHS Markit, told CNBC.

That is why the U.S. has avoided taking “harsh trade measures” against China, he added.

But there still have been some actions against Asia’s largest economy.

Last month, the Commerce Department acted on aluminum foil, imposing anti-dumping duties on Chinese imports. Beijing responded swiftly and strongly, saying it was “strongly dissatisfied” with a U.S. decision that was based on a “serious distortion” of facts.

Still, selective duties like that are not the same as “blunt bilateral trade measures that could endanger the overall bilateral geopolitical relationship with China,” Biswas added.