National Post (National Edition)
China gets U.S. tariff delay but tech plan unclear
Trump fears some ambitions still pose risk
BEIJING • Buy more U.S. exports? Done. Tinker with technology tactics that irk Washington and other trading partners? Maybe. But scrap those plans, seen by Beijing as a path to prosperity and influence? Probably never.
The agreement by President Donald Trump and his Chinese counterpart Xi Jinping on a ceasefire on tariffs postpones the threat of more disruption for China’s exporters and their Asian suppliers. Some economists said Xi might be ready to negotiate in earnest.
Still, Beijing gave no sign of a changed stance on technology ambitions that Washington says violate Chinese market-opening obligations and might threaten U.S. industrial leadership.
Trump’s complaints strike at the heart of the ruling Communist Party’s state-led economic model and plans to restore China to its rightful place as a political and culture leader by creating global champions in robotics and other fields.
“It’s impossible for China to cancel its industry policies or major industry and technology development plans,” said economist Cui Fan of the University of International Business and Economics in Beijing.
At his weekend meeting with Xi in Argentina, Trump agreed to postpone planned U.S. tariff hikes on Chinese imports by 90 days while the two sides negotiate. Xi revived promises to narrow China’s multibilliondollar trade surplus with the United States by purchasing more American exports.
The outcome was “as good as we could have expected,” the chairman of the American Chamber of Commerce in China, William Zarit, said in a statement.
Also late Sunday, Trump said on Twitter that Beijing agreed to cut import duties on U.S. autos. There was no Chinese confirmation.
Treasury Secretary Steven Mnuchin told reporters at the White House Monday that there was an “an immediate focus on reducing auto tariffs,” though he did not provide details or timing.
Mnuchin stressed that the two leaders had detailed conversations on 142 items and said the goal now was to turn the talks into a “real agreement.”
He said both leaders had extended invitations to visit their respective countries and said he expects them to meet in the “near future.”
At the opening bell Monday, the first day of trading since the truce was announced, the Dow Jones industrial average surged 400 points, following global markets sharply higher.
Trump’s promise gives Xi political room to negotiate after Beijing said earlier talks were impossible while Washington “holds a knife” of tariff threats to China’s throat.
The outcome wasn’t the result of a “significant change” by China, Louis Kuijs of Oxford Economics said in a report. Washington instead chose to see Beijing’s argument that it already is making changes “in a more positive light.”
Wang Yi failed to mention industrial policy or Trump’s demand that Beijing make progress toward changing it or face renewed increases.
Those omissions suggest Beijing doesn’t recognize how important those demands are to Trump, said Nick Marro of the Economist Intelligence Unit.
Trump imposed a tariff hike of 25 per cent on US$50 billion of Chinese imports in July over complaints Beijing steals or pressures companies to hand over technology.
Trump hit an additional US$200 billion of Chinese goods with a 10 per cent tariff that had been due to rise to 25 per cent on Jan. 1.
China retaliated by raising its own charges on U.S. imports.
Beijing has tried without success to recruit France, Germany, Japan and other government as allies against Trump.
Xi’s government has offered to alter details but rejects pressure to discard blueprints such as “Made in China 2025,” which calls for creation of champions in artificial intelligence, electric cars and other industries.
China has its own grievances. Beijing is unhappy with U.S. limits on exports of “dual use” technology with possible military applications. Xi’s government complains Chinese companies are treated unfairly in American security reviews of proposed corporate acquisitions.