US-China truce leaves big issues for later
WASHINGTON — 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. President Trump agreed to suspend a tariff hike scheduled for Tuesday on $250 billion worth of Chinese imports.
But nothing’s on paper and details are scarce. China’s state-run media hasn’t 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 AsiaPacific 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. If that’s the case, we should expect more bumps in the road in the lead up to a midNovember meeting between Trump and Xi.”
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 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, dairy and some other commodities. But with 1.4 billion people, it cannot meet its own needs.
Jeff Moon, a former U.S. diplomat and trade official specializing in China who is now president of the China Moon Strategies consultancy, noted that Trump had reason to delay Tuesday’s planned tariff increase. Trade hostilities are weighing on the U.S. and world economies. Tariffs have pushed up costs for U.S. manufacturers and created uncertainty about when and how the trade wars will end.
“The bottom line is that both sides (on Friday) gave themselves permission to do what they wanted to do,” Moon said. “China really needs the food, and Trump doesn’t want to impose the (increase in) tariffs. That’s the bottom line.”
“It’s in the two countries’ interests to dial down the hostilities,” agreed David Dollar, senior fellow at the Brookings Institution and a former official at the World Bank and U.S. Treasury.