Trump Optimistic About China Trade Deal
17 November 2018 - 9:04AM
Dow Jones News
By Bob Davis and Alex Leary
WASHINGTON -- President Trump expressed optimism Friday that the
U.S. could cut a deal with China to ease trade tensions, but said
he would continue to press Beijing for more concessions.
"China wants to make a deal," Mr. Trump said in the Oval Office,
where he reviewed the state of negotiations ahead of a meeting with
Chinese leader Xi Jinping at the Group of 20 nations summit in
Buenos Aires this month.
"They sent a list of things that they're willing to do, which
was a large list. And it's just not acceptable to me yet," Mr.
Trump said. "But at some point, I think that...we are doing
extremely well with respect to China."
The U.S. president kicked off the latest round of talks with a
phone call to Mr. Xi on Nov. 1. That was followed by conversations
between Treasury Secretary Steven Mnuchin and Chinese Vice Premier
Liu He, the two main negotiators.
Discussions have continued between the two nations, particularly
between Treasury Undersecretary David Malpass and China's Vice
Commerce Minister Wang Shouwen, who spoke by teleconference. The
Chinese side also presented an offer that Beijing hopes could ease
trade tensions.
But that offer doesn't go far beyond what China has already said
it would do, such as removing equity caps on foreign investments in
some sectors, including auto and financial sectors, according to
people briefed on the offer. It doesn't address some of the main
demands of the Trump administration, particularly how to deal with
Beijing policies that favor state-owned Chinese firms at the
expense of American business, or the U.S. allegation that Beijing
coerces American firms to transfer technology to Chinese
partners.
As part of the response, China is asking the U.S. to lift
tariffs on Chinese steel and aluminum exports, ease export
controls, and grant licenses for some Chinese businesses to do
business in the U.S., say the people.
The response inside the U.S. government has followed familiar
lines, say the people. Officials at the U.S. Trade Representative's
office, which takes a hawkish view on China, have dismissed it as
woefully insufficient. Others at the Treasury and National Economic
Council, which have been pressing for a deal, look at the Chinese
response as a starting point.
At the G-20, Treasury and the White House take the lead on
planning meetings.
Concern is also growing among Mr. Trump's populist backers that
he will settle too easily with China. The right-wing website
Breitbart attacked the "trade surrender lobby" in the Trump
administration for pushing a "truce" with China. Mr. Trump has
sometimes backed away from a prospective deal with China when
criticized from the right.
During negotiations in Beijing in May, U.S. negotiators gave
their Chinese counterparts an eight-section list of demands, which
included cutting the $375 billion bilateral trade deficit by $200
billion, reducing state subsidies, and ending pressure on U.S.
firms to transfer technology.
Afterward, Chinese negotiators divided the demands into 142
separate items and said they would negotiate on 122, without
specifying which.
On Friday, Mr. Trump suggested there had been some progress in
the negotiations.
The new Chinese list has "a lot of the things we asked for," he
said. "There's some things -- there were four or five big things
left off. I think we'll probably get them, too." Mr. Trump didn't
name those items.
U.S. officials have said that the most they expect from the
Trump-Xi meeting is an agreement to hold off further tariffs and
start formal negotiations -- a kind of cease-fire.
The U.S. has assessed tariffs on $250 billion of Chinese
imports, roughly half of what China ships to the U.S. annually. Of
that amount, the tariff on $200 billion of goods is 10% -- not much
of a hit for importers given that the Chinese yuan has fallen about
that much since the U.S.-China trade fight heated up this
spring.
On Jan. 1, 2019, however, that levy is scheduled to jump to 25%.
Mr. Trump has also threatened levies on the rest of Chinese imports
to the U.S.
Lingling Wei contributed to this article.
Write to Bob Davis at bob.davis@wsj.com and Alex Leary at
alex.leary@wsj.com
(END) Dow Jones Newswires
November 16, 2018 16:49 ET (21:49 GMT)
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