U.S.-China trade truce leaves big issues for later
President Donald Trump heralded a breakthrough in U.S.-China trade talks, and markets rallied in relief over a de-escalation in tensions between the world’s two biggest economies.
But closer inspection suggests there isn’t much substance, at least not yet, to the temporary truce Trump announced Friday at the White House after the U.S. and China wrapped up their 13th round of trade talks.
Yes, Trump agreed to suspend a tariff hike scheduled for Tuesday on $250 billion worth of Chinese imports. And the president said the Chinese agreed to buy $40 billion to $50 billion in U.S. farm products.
But nothing’s on paper and details are scarce. China’s state-run media hasn’t even mentioned the promise to buy all those soybeans and other agricultural products.
And the negotiators have delayed dealing with the toughest issues for future talks. Meanwhile, the U.S. is still scheduled to target another $160 billion in Chinese goods Dec. 15, a move that would extend Trump’s tariffs to virtually everything China ships to the United States.
Friday’s announcement was “a nothing-burger,” said Scott Kennedy, who analyzes China’s economy at the Center for Strategic and International Studies. “I call it the ‘Invisible Deal.’ The only thing that happened Friday was that the U.S. delayed the tariff increase.”
The Trump administration acknowledges that work remains to be done on what it calls “phase one” of ongoing talks with China.
“We made substantial progress last week in the negotiations,” Treasury Secretary Steven Mnuchin said Monday on CNBC. “We have a fundamental agreement. It is subject to documentation, and there’s a lot of work to be done on that front.”
Mnuchin said he expected that he and U.S. Trade Representative Robert Lighthizer will meet with China’s lead negotiator, Vice Premier Liu He, before a November Asia-Pacific summit in Chile. At that gathering, Trump and Chinese President Xi Jinping could officially sign off on a phase one agreement.
“It’s curious that Washington and Beijing have not yet put this ‘deal’ in writing,” said Wendy Cutler, a former U.S. trade negotiator now at the Asia Society Policy Institute. “That suggests that the details may not be worked out yet. We should expect more bumps in the road in the lead up to a mid-November meeting.”
Trump emphasized the agricultural purchases he says China has agreed to. If China ultimately buys $40 billion to $50 billion a year, as Mnuchin said, it would mark a significant win for American farmers, who have been hit hard by the president’s trade wars.
U.S. farm sales to China have never exceeded $26 billion a year, according to the U.S. Department of Agriculture. China already is a major food importer as rising incomes boost its appetite for meat, vegetables and higher-quality grains. The communist government has tried to promote self-sufficiency in rice, wheat, and dairy. But with a population of 1.4 billion, it cannot meet all its own needs.