Pessimism looming over possible China trade deal
Deal could halt trade war, help calm markets.
As a critical WASHINGTON — round of talks with China kicks off next week, the Trump administration is increasingly pessimistic that Beijing will make the kind of deep structural changes to its economy that the United States wants as part of a comprehensive trade agreement, according to officials involved with the talks.
The United States is now weighing whether large Chinese purchases of U.S. goods and more modest economic changes will be enough for a deal to end a damaging trade war between the two nations and help calm volatile markets.
A Chinese delegation led by Liu He, China’s vice premier, will meet with Robert Lighthizer, the Trump administration’s top trade negotiator, and Treasury Secretary Steven Mnuchin on Jan. 30 and 31. The two countries are racing to strike an agreement by March 2, a deadline set by President Donald Trump and President Xi Jinping of China.
If no deal is reached by that date, Trump has said the United States will raise tariffs on $200 billion worth of Chinese goods.
“I would have a hard time, especially considering what’s happening in Washington, believing that this will be wrapped up in a little bow by March,” said Charles Freeman, senior vice president for Asia at the U.S. Chamber of Commerce.
Over the weekend, Trump expressed hope that a deal could be reached but dismissed suggestions that the United States would roll back tariffs in advance of concessions from China.
“We have taken in tremendous amounts of money in the United States because of the sanctions,” Trump told reporters Saturday, apparently confusing sanctions and tariffs. “If we make a deal, certainly we wouldn’t have sanctions.”
Despite Trump’s optimism about reaching a deal, others in the administration and on Capitol Hill have been more circumspect.
“This is an ongoing process with the Chinese that is nowhere near completion,” a Treasury spokesman said, rebutting the suggestion that Mnuchin had recommended rolling back tariffs.
Last week, Sen. Chuck Grassley of Iowa, Republican chairman of the Senate Finance Committee, said that Lighthizer, who is leading the talks, had told him there had been no progress on the “structural” changes that the administration sought from China.
Lighthizer, a longtime China hawk, has been pushing to ensure that China fulfills promises that Xi made to Trump during a meeting in Buenos Aires, Argentina, last year. Lighthizer has expressed concern to colleagues and business groups that Trump could accept a watered-down deal that reduces the trade deficit but offers only symbolic structural changes to help end the trade war and lift the stock market.
To those who see the negotiations as the best opportunity to rebalance the trade relationship between Washington and Beijing, the prospect of rolling back tariffs without sweeping concessions by China would fail to achieve Trump’s goal of ending what he has deemed its unfair trade practices.
“He wants to brag about what he got, not stop tariffs and be able to brag about nothing,” said Derek Scissors, a China expert at the conservative American Enterprise Institute.
A slimmed-down deal could also open Trump up to criticism from Democrats, who in some cases are more
President Donald Trump has focused on narrowing the trade gap between what the U.S. imports from China and what it exports, but the administration is also pressuring Beijing to scale back subsidies of state-owned enterprises, drastically open its markets to foreign investment and end its long-standing practice of forcing U.S. companies to hand over trade secrets.
For years, U.S. companies, including technology firms and automakers, have been clamoring for such changes as they try to gain access to China’s growing market. But many are beginning to fear that if the continuing brinkmanship between the world’s two largest economies is not resolved, U.S. companies will be left in an even worse position. NEW YORK TIMES aligned with the president’s aggressive approach to pressuring China than many Republicans.
“Anything less than a full effort to secure a fundamental reset of the U.S.-China trade relationship is a betrayal of the American economy and the future of American workers, industry, consumers and innovators,” said Rep. Richard Neal, D-Mass., chairman of the House Ways and Means Committee. “The Trump administration needs to stiffen its spine and get tough in these China talks.”