Trump Announces Surprise Meeting as US-China Trade Talks Resume
October 10, 2019
Senior negotiators from the U.S. and China sit down Thursday for another
round of trade talks in an atmosphere of uncertainty about the likely
Over the past week, rhetoric and action from both sides seemed to make
the chance of any substantive progress in resolving the punishing trade
war appear slim.
Early Thursday though, after expressing ambivalence about the end
results of the negotiations, President Donald Trump made a surprise
announcement via Twitter that he and Chinese Vice Premier Liu He would
be meeting at the White House on Friday.
The tweet, sent about 20 minutes after the financial markets opened,
read, “Big day of negotiations with China. They want to make a deal, but
do I? I meet with the Vice Premier tomorrow at The White House.”
The prospect of the meeting sent the stock market zooming upward, as it
was interpreted as a sign that a deal might be closer than anyone had
expected. As of mid-morning on Thursday, though, Trump’s tweet was the
only indication that talks most expected to bear little fruit, might be
more promising than previously believed.
Expectations had been low
Today’s resumption of talks will take place with the clock ticking down
toward a further increase in U.S. tariffs on Chinese imports. A current
25 percent levy on $250 billion of Chinese goods is set to rise to 30
percent on Oct. 15, and a second set of taxes of 15% on more than $150
billion in goods is set to go into place on December 15. China has
signaled that, should the U.S. follow through on those increases, it
would retaliate in kind.
The trade war has cost American consumers tens of billions of dollars in
tariffs, much of which the administration is funneling into aid for
farmers, who have been most affected by the disruption of
long-established trade relationships. Experts say it is difficult to
gauge precisely how damaging the fight has been to China, but that
country’s slowing economic growth seems to be partly attributable to the
The global impact is even more significant. In a report issued this
week, the International Monetary Fund estimated that the US-China trade
war could take a $700 billion bite out of the global economy by the end
of next year -- the equivalent of removing the entire output of
Switzerland from worldwide commerce.
Expectations are still low
Experts watching the negotiations unfold in Washington said that while
some progress might be made over the next day or two, it is likely to be
incremental in nature, with the postponement of scheduled tariff
increases looking like the best-case scenario.
“Nobody’s expecting a big deal,” said Gary Hufbauer, a senior fellow at
the Peterson Institute for International Economics. He said a more
likely outcome is a set of “modest steps” in which the US postpones the
tariff increases, or lifts sanctions on specific Chinese firms like
telecommunications giant Huawei, in exchange for symbolic increases in
Chinese purchases of U.S. agricultural exports, like soybeans, wheat,
William Reinsch, Senior Advisor and Scholl Chair in International
Business, Center for Strategic & International Studies agreed that
larger US demands, including major revisions to Chinese business
practices in areas like intellectual property and large economic
subsidies to state-owned businesses, aren’t likely to be addressed.
“What [President Donald Trump] wants them to do...would basically turn
their market into a western market economy,” Reinsch said. “[Chinese
President] Xi Jinping has been going in the opposite direction.”
Late Wednesday night, U.S. officials began floating the possibility that
the administration would suspend the October 15 tariff increase in
exchange for China agreeing to a currency pact that would commit China
to accepting a market-based exchange rate and refraining from
competitive currency devaluation. As of Thursday morning, there had been
no official response to that gambit from the Chinese.
Trump: ‘China wants to make a deal more than I do’
Even as the Chinese Vice Premier made the rounds in Washington on
Wednesday, meeting with officials from the International Monetary Fund,
Trump expressed ambivalence about the high-level talks.
In a meeting with reporters Wednesday, Trump said, “China wants to make
a deal more than I do,” and reiterated his claim that tariffs he has
unilaterally imposed on Chinese goods, which are paid by U.S. companies
importing them, are a benefit to the United States.
“Look, I'm very happy right now, were taking in billions of dollars of
tariffs,” he said. “They want to make a deal. The question is do I want
to make a deal? The answer would be if we make the right deal I'd love
to do it. I think it would be a great thing for China also.”
He also said that he would not sign off on a deal in which the benefits
are evenly distributed. “It can’t be a 50-50 deal,” he said. “This has
to be a better deal for us.”
For its part, China has also been actively lowering expectations. An
editorial in the Communist Party-run Global Times newspaper this week
said, “There are obviously many trade differences between the two
countries, the attitude of the U.S. is not sincere, the area of conflict
is growing broader, and strategic mutual distrust is increasing.”
By themselves, comments like those from leaders on both sides might have
been enough to derail the talks, which will be the 13th round in the
current series. But with Liu preparing to sit down with U.S. Trade
Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin
Thursday, the issues complicating negotiations are proliferating so
quickly that it is difficult to keep track of them.
On Monday, the United States added 28 Chinese companies to the Commerce
Department’s “Entity List,” which effectively bars U.S. companies from
doing business with them. The companies affected are all involved in the
Chinese government’s brutal suppression of the Uighur ethnic minority in
its western Xinjiang Province, and include eight high-tech firms that do
considerable global business.
On Tuesday, the State Department announced new restrictions on visas
issued to senior Chinese officials, again tying the action to the
repression of Uighurs in Xinjiang. Commerce Secretary Wilbur Ross
followed up on Wednesday with a speech blasting Chinese trade practices,
saying, “China has refused to change its behavior. In fact, its global
trade practices have only gotten worse.”
China disparaged the Trump administration’s moves as an attempt to
increase US leverage in advance of the talks. “No matter how many
bargaining chips the U.S. adds to the trade war, China is prepared for
them,” state media declared.
NBA and impeachment
from the inter-governmental back-and-forth, there are other issues
complicating the talks.
A single tweet last Friday from the general manager of a National
Basketball Association’s Houston Rockets, in which he expressed support
for pro-Democracy protesters in Hong Kong, snowballed over the course of
several days, eventually resulting in China banning the broadcast of any
NBA games to the hundreds of millions of fans of the sport in China.
Additionally, all 11 of the league’s official Chinese partners announced
a suspension of their relationships with the league as of Wednesday.
Muddying the waters even more is the ongoing effort by Democrats to
impeach President Trump, which has been gaining momentum both in the
House of Representatives and among the public at large, according to the
latest polling. However, it remains to be seen just how much Trump’s
impeachment problems will affect China’s willingness to strike a major
deal with him, as the 2020 presidential election is now just under 13