Trump Calls Truce in China Trade War a Big Success, but Little Is Known About the Deal – The New York Times

WASHINGTON — President Trump cast his Saturday meeting with President Xi Jinping of China as a huge win for the United States, insisting that American farmers and automakers would reap immediate benefits from a trade truce that has yet to produce any concrete commitments and created more questions than answers about what China is truly prepared to offer.

Mr. Trump and Mr. Xi agreed during the G-20 meeting in Buenos Aires to pause the trade war between the world’s two largest economies for 90 days and work to resolve several areas of tension, including the trade gap between what America imports from China and what China buys from the United States. But nothing beyond their official statements exists and deep divisions remain, particularly related to China’s industrial policies and its treatment of American companies.

That did not stop Mr. Trump from declaring victory for farmers, automakers and other key political constituencies in the wake of the meeting — statements that helped send volatile financial markets higher on Monday.

Despite talk of a grand bargain, the meeting’s outcome has been clouded by conflicting signals from the White House over how long the truce will last, what commitments China actually made and the president’s tweets touting wins that others in his administration said did not technically exist.

“Farmers will be a very BIG and FAST beneficiary of our deal with China,” Mr. Trump said in a Twitter post on Monday. “They intend to start purchasing agricultural product immediately. We make the finest and cleanest product in the World, and that is what China wants.”

In a separate tweet late Sunday night, Mr. Trump said that China had agreed to reduce and remove tariffs on cars coming into China from the United States. The current tariff rate is 40 percent, which China reached in response to Mr. Trump’s tariffs on $250 billion worth of goods, and it was not clear to what level it would fall.

Larry Kudlow, who heads the White House National Economic Council, told reporters in a briefing that he was uncertain what Mr. Trump meant.

“We don’t have a specific agreement on that,” he said, adding that the administration expects that eventually all the tariffs will go to zero.

Mr. Kudlow also kicked the trade can down the road even further, saying the truce would begin on Jan. 1, giving the two sides until April 1 — rather than the March 1 date initially mentioned — to strike a deal. And in a move that could signal a tough negotiation ahead, Mr. Kudlow said that Robert E. Lighthizer, the United States trade representative, would be formally taking over as the lead negotiator to hammer out a deal.

Mr. Lighthizer — who is known as a tough negotiator with an encyclopedic knowledge of trade law — is a longtime China skeptic who has repeatedly cautioned Mr. Trump not to accept vague Chinese promises that fail to materialize. Mr. Lighthizer will be taking the reins from Steven Mnuchin, the Treasury secretary, who led previous rounds of negotiations with the Chinese but was unable to close a deal that satisfied the president.

“I do think that Ambassador Lighthizer is the best trade negotiator in the business,” Mr. Kudlow, the director of the White House’s National Economic Council, said during a briefing on Monday afternoon. “Mr. Lighthizer will be as vigilant as anybody in the business in monitoring this.”

The lack of specific commitments from China and the conflicting statements from United States and Chinese officials struck many analysts as a sign that the president may ultimately get far less than he is portraying to the public. Deep differences remain, particularly related to China’s treatment of American companies and what the White House says is a pattern of coercing technology and trade secrets from firms.

For instance, after leaving Buenos Aires on Saturday night, Mr. Trump told reporters aboard Air Force One that Mr. Xi had agreed to approve a tech deal it had previously rejected between Qualcomm, a San Diego-based chip maker, and a Dutch firm, NXP.

“You may also want to say that the President has agreed that if the Qualcomm deal that they rejected — which was one of the larger deals of its kind, which China rejected — if that deal came back to him, he would most likely approve it quickly, which is a big thing,” he said.

Qualcomm, however, had already abandoned its plan to buy NXP and is not expected to refile for approval: “While we were grateful to learn of President Trump and President Xi’s comments about Qualcomm’s previously proposed acquisition of NXP, the deadline for that transaction has expired which terminated the contemplated deal. Qualcomm considers the matter closed and is fully focused on continuing to execute on its 5G road map.”

Eswar Prasad, a trade policy professor at Cornell University, said that the warm feelings forged between Mr. Trump and Mr. Xi could soon cool if it appears that commitments are not being met.

“The afterglow of this convivial dinner could fade quickly unless the two sides can find a way to make substantive progress in closing the enormous gulf that still exists between their respective negotiating positions, which will not be easy to bridge,” he said.

And while stock markets rallied and regained some ground after a volatile few weeks, financial analysts cautioned that any celebration was premature.

“The road for a US-China trade deal is not one without potential pitfalls, and that such a ‘truce’ may well prove to be temporary, particularly when considering how the US will try to enforce the implementation of such a deal,” analysts at Citigroup wrote in a note to clients.

Even Mr. Trump’s own advisers were more cautious about the path ahead, which analysts say could be protracted and arduous given the longstanding differences between the two countries and the political risks for their leaders.

Steven Mnuchin, the Treasury secretary, said he was hopeful that a truce to an expanding trade war called for by President Trump and President Xi Jinping of China will lead to a permanent fix.Published OnCreditCreditLeah Millis/Reuters

“This is the first time that we have a commitment from them that this will be a real agreement,” Steven Mnuchin, the Treasury secretary, said Monday on CNBC. “I’m very hopeful we can turn this into a real agreement.”

Mr. Mnuchin noted that China committed to purchase more than $1.2 trillion in unspecified American products, but he emphasized that promises of structural changes to its industrial policies were more important. The Trump administration has been pressuring China to open its markets to American companies without requiring joint ventures or forcing the sharing of intellectual property.

Other members of Mr. Trump’s economic team were even more reluctant to declare victory.

Peter Navarro, Mr. Trump’s top trade adviser who was also at the dinner with Mr. Xi, told NPR on Monday that the Trump administration must be forceful in ensuring that China lives up to his commitments. He said that Mr. Xi spent 30 minutes on Saturday night outlining China’s promises and offering responses to more than 140 of Mr. Trump’s trade demands.

“Talk is cheap,” Mr. Navarro said. “What we are looking for is not more talk, but by the end of 90 days that we see verifiable and real structural changes that yield actual, verifiable and immediate results.”

While both the United States and China have attempted to describe the meeting as “win-win” for both countries, Mr. Navarro, who is perhaps the administration’s most ardent China “hawk,” suggested that Mr. Trump essentially offered Mr. Xi a last opportunity to avoid more tariffs.

“We have given nothing away here, all we have done is given the Chinese time to do the right thing,” he said.

Source: https://www.nytimes.com/2018/12/03/us/politics/trump-china-trade-war.html

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