USTR still expects China's Liu He to come to Washington on Thursday
U.S. Trade Representative Robert Lighthizer said in a briefing with reporters Monday he will put out a Federal Register notice tomorrow (Tuesday) saying the Trump administration will raise tariffs on $200 billion of Chinese goods from 10% to 25%, and that importers will begin paying the new tariffs "the first minute of Friday."
However, Lighthizer said he still expects the top Chinese negotiator, Vice Premier Liu He, to come to Washington on Thursday. Lighthizer said he expected to continue with talks with Chinese counterparts in Washington on Thursday and Friday. That would mark a delay from previous expectations of a round set to start Wednesday. Lighthizer said he had not spoken to Liu since he and Treasury Secretary Steven Mnuchin left Beijing last week. Mnuchin, who was also in the briefing, said he hadn't spoken to Liu either since he left China.
Mnuchin said he thought until recent days that the Trump administration was near an "historic" deal with China — one that was detailed, running to almost 150 pages. But Mnuchin revealed the past week had brought a "big change in direction for the negotiations" with the Chinese backtracking on specific commitments that they had made in writing. Mnuchin said while some concerns arose last week when he and Lighthizer were in Beijing for talks, they received some reassurances. Then, over the weekend, the talks went “substantially backward,” Mnuchin said.
Mnuchin and Lighthizer would not say what, specifically, the Chinese were trying to renegotiate, but they both stressed China's team wasn't differing over minor details. Instead, Lighthizer and Mnuchin used words like "substantive" and "substantial" to characterize the attempted Chinese backflip.
Lighthizer said his interpretation of what happened was that some on the Chinese side found the commitments the negotiating team had already agreed on to be unacceptable. "I would use the word reneging on prior commitments," Lighthizer said.
Mnuchin noted that Liu had been "very helpful to work with" and he'd built a strong relationship with the Vice Premier. He said President Trump had been willing to extend tariff hikes previously because of the "substantial progress" they had made.
Mnuchin said if the Chinese come to Washington and are willing to go back to their original commitments and negotiate in good faith, then of course he and Lighthizer would take that to President Trump. But as of now, the tariffs are going ahead, he said.
Lighthizer, asked what he would say to American businesses who already have goods on the water headed to U.S. ports, which will face significantly higher costs if the tariffs go into effect, said: “There'll be ways to work out" the situation but he gave no specifics. He said it's been clear for some time that something like this — a dramatic tariff increase — could happen.
Lighthizer sometime this weekend told President Trump that China was back-tracking on a trade deal following a round of talks last week, angering the president and leading him to threaten on Sunday to raise tariffs on Chinese goods. Chinese officials reportedly told their U.S. counterparts they would not agree to a trade deal that required changes to Chinese law. China had previously agreed to change its laws in the text of the deal. 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. Lighthizer was angered by the move and briefed Trump, sources advise. President Trump then issued a pair of tweets on Sunday criticizing China and threatening to raise tariffs on about $200 billion in goods to 25% from 10%.