Trump tells Xi trade deficit with China ‘not sustainable’

President Trump is firing a warning shot at China, telling President Xi Jinping that the U.S. trade deficit “is not sustainable,” the White House said on Tuesday.

Trump spoke with Xi on Monday to discuss trade and talks between North and South Korea to deescalate the nuclear crisis on the peninsula, according to a White House statement.

“President Trump expressed disappointment that the United States’ trade deficit with China has continued to grow,” the White House said. “President Trump made clear that the situation is not sustainable.”

{mosads}The president has frequently cited the trade deficit as evidence the U.S. is “losing” to countries like China.

The trade deficit with China grew to $33.5 billion in November, according to the latest figures from the Commerce Department.

Trump is also reviewing a Commerce Department report he was given last week on whether to slap higher tariffs on foreign steel, which would target China’s over-production of steel.

With the report on his desk, Trump will have 90 days to determine whether to assess penalties under Section 232 of a 1962 trade law that gives the president the power to apply higher tariffs and quotas on imported steel for national security reasons.

Commerce also is investigating aluminum imports, another product coming into the United States from China.

Trump, though, has repeatedly said he is holding back trade actions against China in order to persuade Xi to enforce tough sanctions against North Korea over its nuclear-weapons program. Beijing is Pyongyang’s closest trading partner.

“China’s been helping us a lot, so you can veer a little bit differently,” Trump told The Wall Street Journal in an interview last week.

But he has also argued Beijing hasn’t done enough on North Korea and that “they have to do more.”

Both Trump and Xi expressed hope that the talks “might prompt a change in North Korea’s destructive behavior,” the White House said Tuesday.

Trump also stressed he’s standing by his strategy of applying “maximum pressure to compel North Korea to commit to denuclearization” in the call.

Whether the threat of trade actions would motivate China remains to be seen.

In a December New York Times interview Trump said: “China’s hurting us very badly on trade, but I have been soft on China because the only thing more important to me than trade is war, OK?”

“If they’re helping me with North Korea, I can look at trade a little bit differently, at least for a period of time.”

Officials from North Korea and South Korea opened talks earlier this month ahead of the 2018 Winter Olympics in Pyeongchang, South Korea. The North committed to sending a delegation of athletes to the games, a decision that sparked hopes the two sides could also make progress on security issues.

Vicki Needham contributed.

This story was updated at 1:47 p.m.