U.S., China still at loggerheads on trade
WASHINGTON — A restart of trade talks between the United States and China ended Thursday with little sign of progress as Washington moved ahead with additional tariffs and President Donald Trump met with legislators to discuss a new law aimed at curbing Chinese investment.
The bilateral talks, while low level, were the first formal discussions between the two countries since the United States imposed tariffs on $34 billion worth of Chinese goods and China retaliated with its own levies on U.S. products. Still, administration officials continually played down the potential for resolution out of these talks, which came during a week in which the United States placed tariffs on another $16 billion worth of imports and trade officials began six days of hearings on proposed tariffs affecting an additional $200 billion in Chinese goods.
A person familiar with the talks described them as a detailed discussion of China’s policies and the difficulties facing the Chinese
economy. This person described the tone of the conversations as “frank” and said the team from the U.S. spoke with one voice. However, there were no signs of an imminent breakthrough, and no further talks have been scheduled at this time.
Many China experts and U.S. businesses that depend on China as a source and a market for their products say they expect relations to weaken further before a resolution is reached.
“These are relatively low-level, relatively exploratory sessions,” Wilbur Ross, the commerce secretary, told reporters at an event in Kentucky on Wednesday afternoon. “Anytime you have interaction, there’s always some hope of some sort of progress. In terms of a big breakthrough, no, these talks are not destined as of today for a big breakthrough.”
Negotiations seemed to be progressing in May, when officials announced they had agreed on a framework that would see China increase its purchase of U.S. goods and services to reduce a trade imbalance between the countries. But that consensus quickly evaporated, as Trump was criticized for being soft on China and the White House ramped up its tariff threats.
China has expressed frustration that the United States has not established a clear point person in the negotiations, which have been led by an alternating group of officials including Steven Mnuchin, the Treasury secretary; Robert Lighthizer, the U.S. trade representative; Ross; and others. This week, the Treasury Department designated David Malpass, undersecretary for international affairs, to lead the discussions.
While the Trump administration has outlined its broad priorities, the specifics of its demands remain murky, and China continues to meet every new tariff threat with its own promise of retaliation.
“I’m not particularly optimistic that we’re going to see a deal anytime soon,” said David Loevinger, the Treasury Department’s senior coordinator for China from 2009 to 2012. “It’s still kind of unclear what it would take for the U.S. to get to yes on a trade deal.”
Also unclear is whether the tariffs and investment restrictions have done much to persuade China to make further concessions on trade, beyond its offers this year to purchase U.S. goods and open some markets to more foreign competition. Some Chinese officials now appear to suspect that Trump’s trade plans are part of a broader effort aimed at thwarting China’s rise, and that any concessions would do little to prevent what looks like an intensifying struggle for global dominance between the countries.
At a campaign rally in West Virginia on Tuesday, Trump lauded his success in slowing China’s rise.
“When I came, we were heading in a certain direction that was going to allow China to be bigger than us in a very short period of time,” Trump said. “That’s not going to happen anymore.”
Still, there is hope on both sides that the current talks can serve as a steppingstone to more significant negotiations this year. Trump is expected to meet with President Xi Jinping of China at the Group of 20 summit meeting in Argentina in November.
“I don’t see any breakthroughs unless the Chinese bring something completely unexpected, which seems unlikely, but these talks could be useful in setting expectations by identifying what areas are fruitful for further discussion and what ideas are nonstarters,” said Christopher Adams, who had been the senior coordinator for China affairs at the Treasury Department before leaving this year.
On Thursday, the president seemed content to promote his tough trade record as he met with GOP senators including John Cornyn of Texas, Tom Cotton of Arkansas, Mike Crapo of Idaho and Marco Rubio of Florida.
The president praised the lawmakers for passing legislation this month that would strengthen the review of foreign deals in the United States by an interagency group known as the Committee on Foreign Investment in the United States. He also highlighted his own tariffs on China, which he said were bringing a “tremendous amount of money” into government coffers.
“They won’t be stealing our companies anymore, especially companies that are quite complex,” Trump said. “We will protect America’s crown jewels of intellectual property and advanced technologies from harmful foreign investments.”
The new investment rules, which must be put in place in the next 18 months, will allow the committee to look at a wider range of purchases, including real estate deals and those in which foreigners do not take a controlling stake of a company. The government has already started hiring new officials for those posts, a senior administration official said in a briefing call about the legislation on Thursday morning.
Chinese investment in the United States fell sharply in the first half of the year, both in anticipation of the expansion of the committee’s oversight and as a result of tighter controls within China on outbound investment.
The senior administration official added that the United States was open to engaging with China and emphasized that Beijing must address “the fundamental concerns we have raised” over their trade practices.
“We haven’t seen that yet,” he said.