Hooray! "Substantial" Progress With China (Just Don't Ask Where)
The Wall Street Journal reports Trump to Delay Tariff Increases on Chinese Imports.
President Trump said Sunday he would delay an increase in tariffs on Chinese goods set to take effect at the end of this week, citing “substantial progress” on issues including intellectual property and technology transfer after a weekend of talks.
In recent talks, Beijing offered to increase purchases of U.S. farm and energy products and services, ease restrictions on U.S. firms in financial services and auto manufacturing and improve protection of U.S. intellectual-property rights, according to people briefed on the discussions.
But China’s leadership sees all those measures as aligned with the nation’s own interests. Beijing so far hasn’t given much ground on issues it sees as crucial to maintaining the Communist Party’s rule, including government subsidies and support to state-owned companies and other policies that underpin its state-led economic model.
“Trump has now substantially ratcheted up the pressure on his negotiators to strike a deal with China, even if it does little to assuage U.S. hard-liners’ concerns about China’s commitments on core structural issues,” said Cornell University China expert Eswar Prasad. “There is still a yawning gap between the two sides on major issues due to U.S. lack of trust in China’s commitments on structural issues and China’s unwillingness to make any fundamental changes to its industrial and economic strategies.”
Divisions also remain on how to address U.S. complaints that Chinese authorities and companies pressure U.S. companies to share technology. Chinese officials deny that Beijing applies such pressure and argue that foreign firms voluntarily share technology in exchange for access to China’s markets.
The two sides also haven’t agreed how to enforce any deal. U.S. officials, who have for years complained about China’s poor follow-up record, are pushing for provisions that would either permit Washington to reimpose tariffs on Chinese goods should Beijing fail to meet certain milestones—called “snapback” in trade lingo—or leave the levies in place and gradually remove them if Beijing meets agreed-upon yardsticks.
If we are any better off now than where we were before Trump aka Tariff Man started firing tariff missiles around the globe, please let me know where.
Perhaps something does come out of this. But so far Trump has not made any trade deals better than the ones already in place. USMCA is no better than NAFTA, and arguably worse.
It does not appear China is doing more than it would have with much less bravado.
Importantly, Trump is under pressure from farm states. He desperately needs a deal. China understands that full well.
Mike "Mish" Shedlock