Trump to Greet China’s Trade Negotiator as Deadline Presses
President Donald Trump is due to meet with China’s top trade negotiator Friday afternoon, as talks continue to try to defuse the tariff war between the world’s economic superpowers.
Just a week remains to avoid a sharp increase in US duty rates on more than $200 billion in Chinese exports — though Trump has suggested he could extend the March 1 deadline.
Global stock markets were higher with Trump’s personal involvement seen as a sign of the White House’s confidence in a successful outcome. The fourth round of talks have been underway all week, with senior officials meeting as of Thursday. The White House said Trump would meet with China’s Vice Premier Liu He, who is leading the delegation from Beijing, early Friday afternoon.
China’s President Xi Jinping also met with US negotiators last week in Beijing, a sign the two leaders are taking a keen interest in the high-stakes talks, as the conflict weighs on the global economy. Christine Lagarde, head of the International Monetary Fund, called the US-China trade tensions a “major risk” to world economic growth. Since July, the countries have hit out with tariffs on more than $360 billion in two-way trade.
(Bloomberg) — White House officials are discussing a possible summit on trade between Trump and China’s Xi Jinping as early as next month, according to people familiar with the matter, as trade talks in Washington reach a crucial point.https://t.co/pZr76IDFaa #tictocnews pic.twitter.com/VpoX68tkFL
— David S. Joachim (@davidjoachim) February 22, 2019
While the tariffs alone are having “minimal” effect on global trade, they are damaging business confidence and weighing on stock markets, she said. “I cross my fingers every morning and my toes every evening because I hope that it is going to end up with a way to fix the system, not break it,” Lagarde told the US radio program Marketplace. The IMF has cut its forecast for global growth this year due to the combined impact of the trade war. But a clear-cut solution could be difficult given the US demands for far-reaching structural changes.
Analysts say the two sides are likely to trumpet mutual agreements to resolve the easier parts of the trade dispute — increasing purchases of American exports, more open investment in China and tougher protections for intellectual property and companies’ proprietary technology. The harder parts covering issues like avoiding currency devaluation, and scaling back China’s ambitious industrial strategy for global preeminence, are another question.
Analysts say the two sides are likely to trumpet mutual agreements to resolve the easier parts of the trade dispute — increasing purchases of American exports, more open investment in China and tougher protections for intellectual property and proprietary technology.
The harder parts covering issues like avoiding currency devaluation, and scaling back China’s ambitious industrial strategy for global preeminence, are another question. US Trade Representative Robert Lighthizer is leading the US negotiating team, which also includes Treasury Secretary Steven Mnuchin and Commerce Secretary Wilbur Ross.
The two sides are working towards formalizing commitments in various ahead of a possible meeting between Trump and Xi. CNBC cited sources Friday saying the meeting could take place in late March at Trump’s Mar-a-Lago golf resort. Gary Clyde Hufbauer, a trade expert at the Peterson Institute for International Economics, said China may have to remove its tariffs in order to increase purchases of US goods, but Trump may feel no pressure to roll back the duties he imposed last year.
“The big surprise would be a complete removal of tariffs by Trump but I’m expecting an asymmetrical removal of tariffs by China in order to get to some of these numbers,” he said. China’s retaliation have hit US farm exports hard. The US Agriculture Department estimated this month that US soy exports would not turn to their pre-trade war levels for another six years.
According to Bloomberg, China is preparing an offer to buy an additional $30 billion a year of US agricultural goods, including soybeans, corn and wheat. Global stock markets have been battered amid the trade tensions, but word of progress had Wall Street in a cheerful mood, with the benchmark Dow Jones Industrial Average up 0.6 percent shortly before 1800 GMT.
William Reinsch, a former senior Treasury official for trade in the administration of President Bill Clinton, told AFP a risk for Trump is whether any agreement holds and the Chinese honor their commitments. “If it unravels and we have a string of unmet commitments and then US retaliation right before the election, we’re kind of right back where we started,” he said.