Donald Trump team and China resume uphill effort to end trade rift

Minnie Murray
April 5, 2019

Some key lawmakers have said they will not vote on the agreement unless Trump first lifts steel and aluminum tariffs he imposed against the two neighboring countries, which so far he has not indicated a willingness to do. Three days later, he predicted that he would sign a deal "fairly soon".

Trump is scheduled to meet in the Oval Office at 4:30 pm with Chinese Vice Premier Liu He, who leads Beijing's negotiating team.

Under the proposed agreement, China would commit by 2025 to buy more U.S. commodities, including soya beans and energy products, and allow 100 per cent foreign ownership for USA companies operating in China as a binding pledge that can trigger retaliation from the United States if left unfulfilled, the people said on condition of anonymity because the talks are private. "We've discussed it at length", he said.

The United States and China have levied tariffs on hundreds of billions of dollars' worth of two-way trade since July 2018.

USA officials favour tariffs as a way to maintain leverage on China and ensure those obligations are met.

Trump boasts about the money the government collects in tariff payments, though he often insists incorrectly that foreigners pay the tab rather than Americans.

USA and Chinese officials are still discussing when the two leaders could sit down to sign off on their trade deal. If the two leaders decide to haggle in person over any final details, a third-country venue is more likely.

Tariffs on imports from China and other countries reduced "US real income of US$1.4b per month" and had a similar effect on countries that had retaliated against the United States, according to a study by economists David Weinstein of Columbia University, Mary Amiti of the Federal Reserve Bank of NY and Princeton University's Stephen J. Redding. But it is unlikely that China would agree to an enforcement mechanism that included re-imposition of unilateral U.S. tariffs without the current tariffs being removed, Mr Brilliant said.

Trump said Thursday that any summit would be "here", but he did not specify whether he meant Washington or elsewhere in the United States.

It could be a make-or-break week for the delicate trade negotiations between the United States and China as they drift further beyond the ambitious 90-day clock set a year ago by the leaders of the world's two largest economic superpowers.

In his speech to the Republican committee, Trump said that had he not imposed the tariffs, the Chinese economy would have caught up with the United States within years.

"We're getting to the point where it's clear that both governments want a deal", Myron Brilliant, the Chamber's head of global affairs, told reporters. There has been a lot of convergence on the agenda of the talks in the U.S. and Chinese statements.

But the Trump administration and American companies want structural intellectual property and market economy issues addressed, with a way to ensure that China follows through on its promises, Brilliant said. China, however, wants to see the tariffs removed immediately. "We've agreed to far more than we have left to agree to", he said.

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