Trump Team Set to Take Tough Stand in 90-Day Trade Talks With China
Trump administration officials said they planned to take a tough stand in their 90-day trade negotiations with China or impose further tariffs, as optimism over a truce gave way to uncertainties about how the two sides could find agreement on a wide range of issues.
Having emphasized last weekend the possibilities for a wide-ranging deal, President Trump and other officials switched their focus to issues they want to see addressed and the consequences of not reaching an accord in a time frame that China initially didn’t acknowledge.
Mr. Trump, in a series of tweets Tuesday morning, said he expected to see China start buying more U.S. agricultural exports immediately, which the U.S. said had already been agreed upon in the meeting between Mr. Trump and Chinese President Xi Jinping in Buenos Aires, a commitment Beijing hasn’t commented on.
“When people or countries come in to raid the great wealth of our nation, I want them to pay for the privilege of doing so,” he said, adding: “I am a tariff man.” He also noted that the U.S.’s 90-day deadline for negotiations began last weekend.
Earlier Tuesday, the president’s national security adviser, John Bolton, called for legislation to ban imports of products or services generated from theft of American intellectual property.
“Is there a path forward in which we can have fair and reciprocal trade? Sure,” said Mr. Bolton speaking at The Wall Street Journal’s CEO Council held in Washington. But “we need to see some major changes in their behavior.”
The markets tumbled in response, with the anxiety driven in part by perceptions the White House is taking a hard line in its negotiations with China without agreement between the two countries on some fundamental issues.
The list of concerns over Chinese behavior extends beyond trade: theft of advanced technology; copyright infringement; and cyber-spying.
The biggest target of President Trump’s ire is the $376 billion U.S. merchandise trade deficit with China. And as Mr. Trump addresses the imbalance by imposing tariffs and threatening more, China has retaliated with its own tariffs, particularly on U.S. agricultural exports to China. The disruptive power of those tariffs has rattled businesses, farmers, ranchers— and investors in U.S. financial markets.
At the meeting in Argentina, Mr. Trump and his negotiators agreed to suspend a planned Jan. 1 increase in tariffs on $200 billion in Chinese goods to 25%, from 10%, as the two sides negotiate over Chinese economic policies.
Since the weekend summit, China acknowledged for the first time the 90-day timetable for negotiations, saying Beijing would work with the U.S. to resolve disputes. A brief statement attributed to an unnamed spokesman posted on the Commerce Ministry’s website Wednesday morning in Beijing called the 90-day period “a definite timetable.”
The statement didn’t mention other measures the White House said China agreed to, including purchases of agricultural and other products, tariff reductions for imports of U.S. autos and discussions on intellectual- property protection and other structural issues. The Chinese statement said “the Chinese side will work to carry out the items on which consensus has been reached, the sooner the better.”
The mixed messages have left many in the markets uncertain about the prospects for a deal. U.S. Treasury Secretary Steven Mnuchin, said “the (stock) market is now in a wait and see” moment with regard to China: “Is there going to be a real deal at the end of 90 days or not?”
Mr. Trump’s chief economic adviser, Larry Kudlow, who usually makes optimistic pronouncements about the prospects for a deal with China, was stark as the talks get under way. “I would like us to get a deal,” Mr. Kudlow said. “But it’s got to be a good deal and it’s got to be verifiable.”
The Trump administration has expressed hope that an eventual agreement would cover more than 142 separate issues, including intellectual property, technology, cybersecurity, currency, agriculture and energy. “If we can get the structural changes, U.S. companies are going to sell a lot more goods with a growing China middle class,” Mr. Mnuchin said. “If we can get this right it is one of the biggest economic opportunities.”
Mr. Mnuchin emphasized that the Argentina meeting marked the first time that China responded to U.S. demands with specific commitments. He didn’t expand much on the commitments beyond saying the U.S. and China engaged on topics including intellectual property rights and joint ventures.
Mr. Mnuchin said it is significant Chinese senior leaders are willing to engage. He acknowledged differences in opinions on China among Mr. Trump’s top advisers, but insisted that it was standard to have a range of views within any administration.
Mr. Trump tweeted U.S. Trade Representative Robert Lighthizer will be working closely with Mr. Mnuchin, Commerce Secretary Wilbur Ross, Mr. Kudlow and China adviser Peter Navarro to determine whether a deal is possible.
“President Trump said in the meeting with (Chinese President Xi Jinping), even joked, about the fact that we have different people with different views,” Mr. Mnuchin recalled. “President Xi smiled and said ‘yeah, I have the same thing across my table’.”