U.S.-CHINA DEAL AT G-20 PROMPTS FEARS
China specialists in and out of government are increasingly worried that President Trump will make major concessions to China during the Group of 20 economic summit in Argentina this week.
The concerns were amplified by comments by Larry Kudlow, director of the National Economic Council, who said Mr. Trump believes there is a good chance a deal will be reached on the trade war with the Chinese.
The main fear is that China will make promises to curb intellectual property theft and other unfair trade practices in exchange for the U.S. president’s easing of tariffs on Chinese exports.
Many China hawks say any promises from Beijing will be worthless. They note several cases of Chinese duplicity: President Xi Jinping’s promises not to militarize disputed islands in the South China Sea; fuel transfers in violation of U.N. sanctions against North Korea; and Mr. Xi’s 2015 promise to halt the practice of government economic cyberespionage.
The last unfulfilled promise was bolstered by an updated report by U.S. Trade Representative Robert Lighthizer. “This update shows that China has not fundamentally altered its unfair, unreasonable and market-distorting practices that were the subject of the March 2018 report on our Section 301 investigation.” Mr. Lighthizer said.
The March report accused China of engaging in massive theft of U.S. intellectual property as part of a multiyear strategic program.
Mr. Kudlow said Mr. Xi is entering the meeting with Mr. Trump from a weaker position. While the U.S. economy is humming, China is “in a slump” economically, he said.
“The president said there’s a good possibility that we can make a deal, and he is open to it,” he told reporters at the White House.
However, the White House economic adviser added that before a deal can be reached, the Chinese must agree to greater “fairness and reciprocity” on trade. That will include resolving issues related to China’s intellectual property theft, forced technology transfers from U.S. companies, a reduction in trade barriers and addressing U.S. concerns regarding state ownership for Chinese companies overseas.
Mr. Kudlow noted that if Mr. Xi does not give in on these issues, the president is “perfectly happy” to keep the current $200 billion in tariffs and increase tariffs by another $267 billion in the coming months. “That’s not a certainty, but that’s the schedule,” he said.
Other U.S. government sources say Mr. Xi is becoming increasingly desperate to end U.S. tariffs that are having a harsh effect on the world’s secondlargest economy.