By Vivian Salama 

WASHINGTON -- President Trump signaled he was in no rush to reach a trade deal with China and pledged that the federal government would come to the financial aid of American farmers hurt by Beijing's retaliatory tariffs.

"When the time is right, we will make a deal with China," Mr. Trump said on Twitter on Tuesday. "My respect and friendship with President Xi [Jinping] is unlimited but, as I have told him many times before, this must be a great deal for the United States or it just doesn't make any sense."

In remarks to reporters outside the White House later in the morning, Mr. Trump said the U.S. is having "a little squabble" with China, but he believes that a deal can "absolutely happen."

On Friday, the U.S. imposed duties on $200 billion of Chinese imports as the latest round of talks hit an impasse. In response, China said on Monday it would raise tariffs on roughly $60 billion of U.S. imports on June 1. The U.S. is also working on a new round of tariffs that would apply to about $300 billion of Chinese imports, though Mr. Trump has said he hasn't decided yet whether he will impose them.

In a series of early morning tweets discussing the trade standoff, Mr. Trump also leaned on the Federal Reserve over its interest-rate policies. Commenting on how China may try to use lower interest rates to bolster its economy, Mr. Trump said if the Fed "ever did a 'match,' it would be game over, we win! In any event, China wants a deal!"

Over the past month, Mr. Trump has indicated he wishes the U.S. central bank, which for decades has operated with a measure of independence from the executive branch, could boost the economy to help in his trade campaign against China. Beijing's state-run economy enables much greater coordination between fiscal and monetary authorities.

Fed officials have indicated in recent days they see no reason to cut interest rates right now and would need to see evidence of economic deterioration to put a rate cut on the table.

Escalating tariffs are expected to fall hard on successful exporters to China, such as American farmers. Commodity prices and exports have dropped sharply during the conflict, taking a bite out of farm income. Mr. Trump said on Tuesday that the government would replace farmers' lost income with federal aid, a pledge first unveiled last week.

"Our great Patriot Farmers will be one of the biggest beneficiaries of what is happening now," Mr. Trump said on Tuesday. "Hopefully China will do us the honor of continuing to buy our great farm product, the best, but if not your Country will be making up the difference," he said.

Mr. Trump has enjoyed bipartisan support during his fight with Beijing over trade and intellectual-property protections, but the higher retaliatory tariffs this week have raised new fears about the impact on farmers, retailers and other businesses that rely on trade with China.

"You can't get much done on trade relative to China by engaging in a trade war that only hurts working people and farmers," Democratic presidential candidate Joe Biden said in Concord, N.H. "He's going about it the wrong way," the former vice president added.

Mr. Trump told reporters he was surprised by China's retaliation this week and said his administration continues to look "very strongly" at the possibility of expanding tariffs on additional Chinese goods. Mr. Trump praised his relationship with Mr. Xi but added, with regard to negotiations, "We had a deal that was very close and then they broke it."

Mr. Trump said on Monday he plans to meet with Mr. Xi in June when he is in Japan for the summit of the Group of 20 leading nations.

This month, U.S. and Chinese negotiators touted progress following a round of high-level negotiations in China, and many observers thought a deal was close to being struck last week.

The subsequent impasse came as China was no longer willing to commit in the text of a potential agreement to changing laws covering intellectual property, forced technology transfer, subsidies and other issues at the heart of the dispute, The Wall Street Journal has reported.

On Tuesday, a spokesman for China's Foreign Ministry, Geng Shuang, said the U.S. had backed away from a consensus on trade-procurement figures. "So it is by no means China who is backtracking and breaking promises," he said.

Nick Timiraos and Ken Thomas contributed to this article.

Write to Vivian Salama at vivian.salama@wsj.com

(END) Dow Jones Newswires

May 14, 2019 14:03 ET (18:03 GMT)

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