TRUMP ACCUSES CHINA OF RENEGING ON TRADE COMMITMENTS
WASHINGTON - Senior U.S. officials accused Beijing on Monday of reneging on commitments it had agreed to during negotiations for a comprehensive trade deal and vowed that punishing tariffs on Chinese imports would more than double Friday.
Despite the tough talk, Robert Lighthizer, the president’s chief trade negotiator, and Treasury Secretary Steven Mnuchin said the administration expects to host Chinese Vice Premier Liu He and a Chinese team for further talks in Washington on Thursday evening and Friday.
But with the officials publicly underscoring President Donald Trump’s weekend anti-china broadside, prospects for a deal this week - as the administration had hoped for - appear to be fading.
“Over the course of the last week or so, we have seen an erosion in
commitments by China. I would say retreating from specific commitments that had already been made,” Lighthizer told reporters in Washington. “That, in our view, is unacceptable.”
The Chinese sought to make “substantial” changes in the agreed text of a voluminous, seven-chapter pact, he said, adding, “Really, I would use the word ‘reneging’ on prior commitments.”
The administration officials declined to specify where the Chinese sought to amend the proposed accord.
Chinese demands to water down provisions in the deal were delivered to the administration late last week, infuriating the president, who responded by announcing new tariff plans Sunday. That move triggered the sharpest fall in Chinese stock markets in more than three years.
In the United States, the market reaction was muted. The Dow Jones industrial average fell 471 points at the open, but quickly recovered and closed at 26,438.48, down less than 67 points or 0.25%.
The apparent diplomatic impasse comes with both countries having reason to believe they could endure a prolonged conflict - and with Chinese President Xi Jinping probably reassessing the political gains and losses associated with bowing to U.S. demands.
The U.S. economy grew in the first quarter at a surprisingly robust 3.2% rate, and unemployment fell last month to its lowest point in nearly 50 years. Meanwhile in China, government stimulus measures have insulated the economy from the worst effects of the trade war.
“Recent developments on both sides may have ended up strengthening both sides’ spines and reducing the urgency of a deal,” said David Loevinger, managing director of TCW, a Los Angeles-based investment firm.
Lighthizer and Mnuchin, who briefed reporters at the trade representative’s office, brushed aside worries about the impact on the economy or financial markets if the talks collapse. Mnuchin said stock market concerns are playing no role in the administration’s strategy.
Liu, the Chinese negotiator and a Xi ally, may have encountered political resistance when he presented the nearly complete deal to the Politburo Standing Committee of China’s Communist Party, said Dennis Wilder, a former China analyst for the Central Intelligence Agency.
U.S. demands for structural changes in China’s state-led economic model would hurt many state-owned enterprises and their political patrons.
Trump’s ambitions for a fundamental reset of the U.s.-china economic relationship are colliding with internal politics in the opaque Chinese system.
The American president wants a dramatic reduction in the $375 billion U.S. trade deficit with China along with an end to discrimination against foreign firms in China.
Though perhaps the most powerful Chinese ruler since Deng Xiaoping, Xi has been criticized for mismanaging the relationship with the United States and failing to understand its populist president.