Trade War Update: Just Shedding Weight to Get It Done?

By Matthew McMullan
May 01 2019 |
U.S. Trade Representative Robert Lighthizer, Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He pose for a photograph in Beijing. | Photo courtesy of the Treasury Secretary’s Twitter handle.

A deal could be reached by late next week, reports say. But will it be worth it?

The U.S.-China trade dispute continues … but it sure sounds like there could be a deal soon! U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin were in China trying to bring this thing to a close, because as one White House official told a gathering of the ultra-wealthy in California this week, “it won’t go on forever.”

“At some point in any negotiation you go, ‘we’re close to getting something done so we’re going to keep going,’” said Mick Mulvaney, President Trump’s acting chief of staff. “On the other hand, at some point you throw up your hands and say ‘this is never going anywhere.’”

Mulvaney also said “we’re not going to do a deal for the sake of doing a deal.” Meanwhile, it’s being reported the Trump administration is trying to get something done by dropping demands that China ease restrictions on the movement of data. The New York Times writes:

China describes its data restrictions as an issue of national security, but technology firms, financial advisers, energy companies and others argue that the rules are intended to help Beijing dominate data-intensive industries. American firms say the restrictions increase their costs, force them to share sensitive technology with Chinese partners, make them more susceptible to cybertheft and leave them beholden to Chinese monitoring and censorship.

Another U.S. demand concerned commercial cyber theft. The Financial Times reports that’s been dropped:

Mr Trump has softened his administration’s opening position on what it originally characterised as “Chinese government-conducted, sponsored, and tolerated cyber intrusions into US commercial networks”, according to several people briefed on the negotiations. The US is instead likely to accept a watered-down commitment from Beijing as an alternative.

This follows a report from a few weeks ago that U.S. retracted its demand that China curb industrial subsidies as a condition for a trade deal. Those are the same subsidies that help drive a lot of global industries into overcapacity, and led the Trump administration to raise tariffs on steel and aluminum imports.

The Lighthizer-Mnuchin trip to Beijing was “productive,” according to the Treasury secretary. Check out the picture; smiles all around!

Wow, such big smiles. Anyway, Politico reports the sides are closing in on an agreement to lift some of the U.S. tariffs imposed on Chinese imports, there’s consensus on how to actually enforce the deal, and that “expectations are high that the two sides could announce a deal by the end of next week, setting the stage for a summit between President Donald Trump and Chinese President Xi Jinping to sign it.”

I dunno, man. Maybe President Trump really wants a deal signed, but it sounds like a lot of important stuff is getting dropped for the sake of expediency. But … that White House official said they’re not doing a deal for the sake of a deal, so why not keep negotiating? The president is watching cable news; he won’t notice!