Administration officials see Chinese side as reneging on commitments.
Last time we checked in on the U.S.-China trade negotiations, it was all smiles in Beijing following meetings between U.S. Trade Representative Robert Lighthizer, U.S. Treasury Secretary Steve Mnuchin and China’s Vice Premier Liu He. The story then was the American side had walked back some key demands, and the agreement was shedding weight so a deal could shortly be sealed.
.@USTradeRep Ambassador Lighthizer and I just concluded productive meetings with China’s Vice Premier Liu He. We will continue our talks in Washington, D.C. next week. pic.twitter.com/Y7vYW72a6e
— Steven Mnuchin (@stevenmnuchin1) May 1, 2019
But if you look closely at that picture they took …
Something … seems off …
Wait a friggin’ minute …
These dudes aren’t smiling.
Turns out the American negotiators weren’t happy at all with what they heard from their Chinese counterparts! Bloomberg writes:
The U.S. side, led by Trade Representative Robert Lighthizer, thought that issues around what’s known as forced technology transfer were resolved and considered the Chinese position on changing its laws to be an attempt to renegotiate, the people said. Lighthizer was angered by the move and briefed Trump.
And so President Trump went from tweeting about this to tweeting this:
For 10 months, China has been paying Tariffs to the USA of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods. These payments are partially responsible for our great economic results. The 10% will go up to 25% on Friday. 325 Billions Dollars….
— Donald J. Trump (@realDonaldTrump) May 5, 2019
Yes, that's right: The president announced (and Lighthizer confirmed) that in response to what he considered backsliding by the Chinese government a 10 percent tariff on $200 billion of Chinese imports would be raised to 25 percent this Friday.
Yikes! Despite this announcement the Wall Street Journal reports that Vice Premier Liu plans to attend talks in Washington this week. The Chinese side concluded a “full breakdown in the talks would be difficult to repair and would exact costs on the Chinese economy.” The Journal also noted that “in doing so, Chinese leaders broke from a public position that Beijing wouldn’t negotiate under threat.”
The New York Times story on these developments goes into some detail about why Chinese negotiators are willing to keep talking: Without a trade deal, the Chinese economy may destabilize.
That’s clearly part of the Trump administration’s thinking. “They have more to lose,” an administration official told Politico. “It’s simple math. They cannot lose access to the U.S. consumer.”
And so the White House has ratcheted up the pressure, and the talks will go on. Secretary Mnuchin, the good cop in his partnership with Ambassador Lighthizer, agreed with the trade representative’s assessment on Monday that their Chinese counterparts were backsliding on their commitments. But, the Times noted, he also said the administration would reconsider this Friday’s tariff hikes if the negotiations get “back on track.”
There's a lot of bipartisan support for the tough negotiation position the administration has taken. So don't settle for selling soybeans, Mr. President!