A trade deal between the U.S. and China would be less likely if President Xi Jinping’s government cracks down violently on the large-scale protests in Hong Kong, Secretary of State Mike Pompeo told CNBC on Tuesday.
It would be “more difficult” to reach a trade deal if the protests end “in a way that there was violence — the president said something like Tiananmen Square,” Pompeo said in an interview on “Squawk Box. ”
He was referring to the 1989 student-led demonstrations in Beijing’s Tiananmen Square, which ended in mass bloodshed after government-deployed soldiers and tanks and fired on those protesters.
“I hope that the trade negotiations move forward, and I hope that Hong Kong is resolved in a peaceful way. Those would be the best outcomes for both China and the United States,” Pompeo said.
Hong Kong has for weeks been roiled by massive protests that have resulted in tense clashes with police.
The protests stemmed from opposition to an extradition bill that critics say would have given Beijing undue control over Hong Kong. But after the bill was suspended, the scope of the protest movement expanded to encompass issues of civil rights and democracy. When Britain handed over Hong Kong to China in 1997, Beijing promised that Hong Kong’s economic and political systems would not be changed for 50 years.
Over the weekend, President Donald Trump said that a trade deal “would be very hard” to do “if they do violence. If it’s another Tiananmen Square … I think it’s a very hard thing to do if there’s violence.”
Republican and Democratic lawmakers alike have come out in support of the protesters. But the movement against Chinese interference complicates the political landscape for Trump, who has sought a trade deal with Beijing that addresses issues such as trade deficits, the alleged theft of intellectual property and forced technology transfers.
Even without factoring in Hong Kong’s impact on negotiations, the trade war between the two economic superpowers has shown little sign of slowing down. The U.S. has imposed 25% tariffs on about $250 billion worth of Chinese imports, while Beijing has responded with its own tariffs on $110 billion in U.S. goods.
Despite the White House’s decision last week to delay some new tariffs on Chinese goods to spare American holiday shoppers, billions in that country’s imports will be taxed on Sept. 1. The rest of that round of tariffs, which will cover roughly the remaining $300 billion in goods bought from China, are slated to go into effect Dec. 15.
China had initially responded to the prospect of new tariffs by announcing that it would no longer buy U.S. agricultural products. The U.S. then labeled China a currency manipulator.