I’ve been covering U.S.-China trade relationships pertaining to agriculture for almost two decades.
And I’ve come to realize that when it comes to China rarely are things as they seem, there is no deal till there is a deal, and even after the ink dries China is fully capable of ignoring what they promised if it suits their national interests.
Last December the POTUS and Chinese President Xi Jinping called for a 90-day trade truce that expires on March 2. That’s not a lot of time.
For its part the U.S. says there was progress in three days of negotiations last month in Beijing among mid-level officials at ending the U.S. China trade war. It was reported by the Office of the U.S. Trade Representative that the two sides made progress in identifying their differences.
The USTR said:
“The meetings were held as part of the agreement reached by President Donald J. Trump and President Xi Jinping in Buenos Aires to engage in 90 days of negotiations with a view to achieving needed structural changes in China with respect to forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions and cyber theft of trade secrets for commercial purposes, services, and agriculture.”
But the only tangible take away appeared China’s commitment to “purchase a substantial amount of agricultural, energy, manufactured goods, and other products and services from the United States.”
If you haven’t noticed, the USTR statement hasn’t a single word suggesting three days of talks produced constructive conversation or a step forward to settling the trade war. But China must have not been part of those three-day negotiations. The Chinese slapped on rose-colored glasses and declared:
“Both sides actively implemented the important agreement of the heads of both countries, and held broad, deep, and meticulous discussions on shared observations on trade issues and structural problems, laying the foundation for addressing areas of common concern. Both sides agreed to continue to keep in close contact.”
Well, covering China trade I get this. For three days, China ran rings around U.S. negotiators, agreeing to nothing of importance while keeping all its options open.
For its part the U.S. continues to demand dollar-for-dollar trade balance with China. But at the moment it appears mathematically impossible for China to buy enough U.S. goods to reduce its surplus to zero.
But that’s not stopping the Chinese from floating the possibility that they can zero out China’s trade imbalance by 2024.
The offer looks like this: A promise to increase its annual goods imports from the U.S. from $155 billion in 2018 to $200 billion this year and then escalating steps thereafter ultimately reaching $600 billion by 2024.
I’m not sure that’s possible but it really doesn’t matter because U. S. negotiators have been less than impressed with and downright unreasonable, demanding China zero out the trade imbalance in 24 months.
The trade imbalance isn’t the only problem. Or even the most significant. The bigger fight is over intellectual property rights. The Chinese are working on what they believe is a comprehensive deal to address that they claim would protect foreign investor property rights and prevent forced technology transfers.
The plan is under review with China’s Standing Committee of the National People’s Congress. From the U.S. perspective I imagine the deal is less than ideal.
Essentially U. S. companies believing that China has stolen intellectual property would have to make their case in Chinese courts by collecting evidence of violations. That’s a high bar to be sure.
Earlier this month, the President announced he will not be attending the World Economic Forum in Davos, Switzerland. It was anticipated the POTUS might meet on the sidelines with China economic czar, Vice Premier Liu He. Lost opportunity.
Meanwhile, on Tuesday the Financial Times reported that U.S. canceled this week’s planned meetings with lower level Chinese trade representatives intended to pave the way for weightier trade negotiations January 30 and 31 in Washington D.C.
But White House economic adviser Larry Kudlow quickly denied the Financial Times report.
Who to believe? I say it doesn’t really matter.
Not to put too fine a point on it, but there is no, none, zippo, nadda, ain’t going to happen chance of a comprehensive solution in six weeks.
At best there could be some sort of smaller face-saving deal with promises to keep negotiations open – for example agreement to stall or end further tariffs. But the POTUS could decide to ratchet up the heat even further after realizing that China has for the most part given the U.S. the run around.
Here’s betting tariffs continue in some form.
About Dave Dickey
Dickey spent nearly 30 years at University of Illinois at Urbana-Champaign’s NPR member station WILL-AM 580 where he won a dozen Associated Press awards for his reporting. For 13 years, he directed Illinois Public Media’s agriculture programming. His weekly column for Big Ag Watch covers agriculture and related issues including politics, government, environment and labor. Email him at email@example.com.
This column reflects the writer’s own opinions and not those of Big Ag Watch.