Virtually since the trade war began back in the spring of 2018, President Trump has warned in tweets, speeches and comments to reporters that the US has the upper hand for one simple reason: The pace of China's economic growth is slowing, which is a serious problem for the Communist Party - whose mandate to rule is dependent on its ability to lift more Chinese out of poverty.
In Trump's view, Beijing needs a swift resolution to the trade war to boost growth back above the 6.5% threshold.
The Chinese leadership doesn't see it that way - and so far at least, they've given no indication that they're in a rush to strike a deal (if anything, the opposite is true).
But after the historically poor GDP print from last week (which was, of course, goalseeked to match expectations) President Trump couldn't help himself and once again bashed Beijing in a tweet, gloating that President Xi and Vice Premier Liu He probably regret sabotaging the original deal. Even though it's US importers who must bear the costs of Trump's tariffs, the president again insisted that "tariffs are paid for by China devaluing and pumping not the US taxpayer."
China’s 2nd Quarter growth is the slowest it has been in more than 27 years. The United States Tariffs are having a major effect on companies wanting to leave China for non-tariffed countries. Thousands of companies are leaving. This is why China wants to make a deal....— Donald J. Trump (@realDonaldTrump) July 15, 2019
....with the U.S., and wishes it had not broken the original deal in the first place. In the meantime, we are receiving Billions of Dollars in Tariffs from China, with possibly much more to come. These Tariffs are paid for by China devaluing & pumping, not by the U.S. taxpayer!— Donald J. Trump (@realDonaldTrump) July 15, 2019
During comments on Tuesday while chairing a symposium attended by a group of economists and entrepreneurs, Chinese Premier Li Keqiang offered a different perspective: China's economy has seen steady performance. He blamed the recent weakness on global factors, like slowing trade and a weak global recovery, according to Xinhua.
He also pointed out that some indicators have beat expectations, which is accurate: All three core June economic indicators - retail sales, industrial output and fixed investment - beat sharply lowered expectations.
On Tuesday, Chinese Foreign Ministry spokesman Geng Shuang said China’s first-half pace was a "not bad performance” considering developments in the global economy, and accused Trump of being "totally misleading" with his claims about Beijing's need for a deal, Reuters reports.
Ultimately, Trump's argument might fall apart later this month when the first reading on US second-quarter GDP hits. According to the latest reading from the Atlanta Fed's GDP Nowcast, growth is expected to slow to 1.4%.