Trump's Bewildering Trade Policy with China Continues | China May Not Come to U.S.

Posted on 09/16/2018 6:31 AM

Tariffs on $200 billion in Chinese goods coming this week, as U.S. awaits meeting with China that may not occur

The ask-to-meet-and-then-hit Trump approach to trade relations with China will continue to bewilder most, even some in his own administration. On Sunday, the Wall Street Journal reported that China is considering declining the Trump administration’s offer of trade talks later this month, citing officials with knowledge of the discussions. Beijing has repeatedly said it wouldn’t negotiate under threat.

President Trump has decided to impose tariffs on $200 billion in Chinese goods, in an announcement expected Monday or Tuesday. The new tariffs would apply to more than 1,000 products. As with anything with the U.S. president, decisions could change quickly as details are finalized.

The administration plans to start with tariffs of around 10%, below the 25% level announced in early August. The lower level follows public hearings and written comments where importers and others complained of the possible impact of the duties, notably ahead of the year-end holiday shopping season.

The tariff level could be raised back to 25% if Trump concludes that Beijing doesn’t soon show signs that it is acceding to U.S. demands to change its economic policies, according to the Wall Street Journal, who also reported the tariffs would take effect weeks before November elections, a major concern of Republicans in close election races.

White House spokeswoman Lindsay Walters said in a statement Friday: “The president has been clear that he and his administration will continue to take action to address China’s unfair trade practices. We encourage China to address the longstanding concerns raised by the Unites States.”

China is considering declining the Trump administration’s offer of trade talks later this month, according to the Wall Street Journal, citing officials with knowledge of the discussions. Beijing has repeatedly said it wouldn’t negotiate under threat.

“China never said it doesn’t want to negotiate with the U.S.,” Yang Weimin, a former senior economic adviser to President Xi Jinping, said Sunday. “But the U.S. side has to show sincerity” toward resolving the trade dispute. “China is not going to negotiate with a gun pointed to its head,” said a current senior official who advises the leadership on foreign-policy matters:

China can adopt “export restraints” as a way to hit back at the U.S. besides retaliatory tariffs, former Finance Minister Lou Jiwei told a gathering of Chinese and American academics and business executives Sunday.

Even if talks are held, Vice Commerce Minister Wang Shouwen, who led China’s negotiating team in the last round, would again lead a group for the talks proposed for next week. Liu himself would follow up with a trip to Washington on Sept. 27 and Sept. 28. Beijing is rethinking both trips and is likely to back off if the U.S. moves ahead with its tariff announcement, the officials familiar with the discussions told the WSJ.

“There is a lot of uncertainty right now,” one of the officials said. “If more tariffs come out, the Chinese side could very well choose not to go.” The officials caution that no final decision has been made on the trips.

The White House hopes Beijing sends Chinese Vice Premier Liu He to Washington to meet with Treasury Secretary Steven Mnuchin, who last week had sent an invitation. If those talks go well, Liu may also meet with Trump, something that did not occur the last time the Chinese official came to Washington, much to his dismay.

Trump recently told reporters that he’s ready to add tariffs on another $267 billion in Chinese goods. If so, the cumulated total of tariffs would amount to all U.S.-bound Chinese exports.

Meanwhile, a split between President Trump's trade policy team continues on parts of U.S./China trade policy matters, but they all agree an effort is needed to push China to change its economic practices. Trump officials disagree on the tactics, with some advocating a more cautious, diplomatic approach. But U.S. Trade Representative Robert Lighthizer and trade adviser Peter Navarro had been urging the administration to move ahead on tariffs regardless of Chinese actions in a bid to deepen pressure on Beijing to change its policies. But Treasury Secretary Steven Mnuchin and National Economic Council Director Lawrence Kudlow continue to push talks to work out a deal.

China says it will not 'surrender' in the trade war. "The Trump administration should not be mistaken that China will surrender to the U.S. demands," an editorial in the state-run China Daily paper said on Friday. "It has enough fuel to drive its economy even if a trade war is prolonged." Chinese leaders have vowed to retaliate to any escalation of the trade battle with punitive steps of their own.


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