Todd Bishop
US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin spoke to Chinese Vice Premier Liu He on September 5. The two sides agreed to hold the thirteenth round of China-US high-level economic and trade consultations in Washington in early October. Earlier on July 31, the Chinese Ministry of Commerce announced that the two sides will hold the next round of high-level economic and trade consultations in the United States in September. It now appears that the September negotiations between China and the United States were scheduled to be postponed to October.
Recently, various calls and talks between China and the United States have been postponed. Earlier on August 13, Wright Hize and Mnuchin talked with Liu He. The official Chinese press said that the two sides agreed to call again in the next two weeks. But there is no news that they have a call in the next two weeks, and the current September 5 call is obviously not within the two weeks of what was said at the time.
On August 15th, Donald Trump publicly told the media that the China-US trade war will not last long, and he will soon talk to Xi Jinping. But until now, there has been no news of his conversation with Xi Jinping. When the reporter asked if he had a conversation with Xi Jinping, Trump would not disclose whether he had talked with Xi Jinping recently and declined to comment.
In Trump’s view, the reason for the delay in negotiations and the unsatisfactory call is that Beijing is delaying. Trump issued a message on Twitter on September 3rd. “If China is to be dragged to his second term, it will be even harder to reach an agreement.” “In view of the damage caused by the United States’ tariffs on Chinese goods to the Chinese economy, Beijing cannot afford to delay the negotiations.” Earlier, Trump accused Xi Jinping of trying to slow down the progress of the negotiations before the US presidential election in 2020, hoping to wait until Trump stepped down.
The reason for the delay was actually that Washington had not met the necessary conditions set by Beijing.
After the Osaka Special Economic Conference, Beijing repeatedly proposed to increase the procurement of self-made agricultural products according to domestic needs, and the US should create favorable conditions for procurement. After Trump announced the tax increase on August 1, Chinese Ministry of Commerce spokesman Gao Feng said at a press conference on August 22, “I hope that the US will stop the unilateral escalation of trade frictions, and work in tandem with China. Find ways to solve problems on the basis of equality and mutual respect.” “The US should change its wrong approach and return to the right track to solve problems on the basis of equality and mutual respect.”
Unilaterally escalating trade frictions and wrong practices, it is said that Trump announced the increase in taxes after Xi Jinping reached a consensus on the suspension of tax increases. Beijing’s demands on the United States are “stop” and “change.”
With the China-US tariff war continuing to escalate on August 24, neither Liu He and Wright Heze, or Xi Jinping and Trump, did not have a conversation atmosphere.
If on August 22nd, the Chinese party’s appeal has the component of the proxy, and there is a component that allows the US to reflect on what is wrong, then the official Chinese wording on August 29 is very straightforward.
On August 29, China’s Ministry of Commerce spokesman Gao Feng repeatedly responded to the consultations at the press conference. He repeatedly mentioned that “in the current situation, we believe that the issue that should be discussed is to cancel the further increase of tariffs on US$550 billion of Chinese goods. To prevent the trade war from continuing to escalate.” “The most important thing at the moment is to create the necessary conditions for the parties to continue consultations.” “The Chinese side believes that if China goes to the United States for negotiations, the two sides should work together and create conditions to promote progress in the consultations.” “Renaming some of the imported goods from the United States as the target of additional tariffs is a necessary counter-measure that China has to take. It is hoped that the US will cancel the new tariff-adding measures and prevent the trade war from continuing to escalate.”
China’s position is already clear: the elimination of newly imposed tariff measures and the lifting of further tariffs on US$550 billion of Chinese goods are necessary conditions for further consultations. In other words, Beijing may not go to Washington to negotiate with the United States continuing to increase taxes.
After the tariff on September 1 came into effect, there will be two waves of tariffs between China and the United States on October 1 and December 15. The suspension of tariffs on October 1 and December 15 is critical. Previously, whether it was the Argentine Chamber of Commerce or the Osaka Special Committee, the consensus reached between China and the United States was to suspend the tariff increase and start negotiations. If negotiations continue under the threat of tariffs, it will undoubtedly be a compromise of Beijing’s position. The United States advocates that border taxation is a bottom line to challenge Beijing’s position.
On September 5th, China’s official announcement of the call by Wright Hize and Liu He showed: “The working layer will conduct serious consultations in mid-September to fully prepare for the substantive progress of the high-level consultation. Both sides agreed that Work together and take practical actions to create good conditions for consultations.”
Some voices believe that this means that Liu He’s visit to the United States in early October is not without preconditions. If the September consultations cannot make substantial progress, the two sides have not taken any practical action, and the consultations in early October will continue to be postponed. Wright Heze Liu He did not talk again until August 5th after the call on August 13th. The two sides reached a consensus on the negotiations in early October. It is likely that the US side agreed to Beijing’s suspension of tariff conditions.
After all, the United States has repeatedly announced that the tax increase is Trump’s claim, and Wright Heze and Mnuchin do not agree. Wright Heze and Mnuchin may be actively convincing Trump to suspend tariffs. The US Christmas New Year’s Day shopping season is coming, and the United States does not want to combat the consumption that can boost the economy.
The tariff escalation between China and the United States from the July 31 negotiations in Shanghai is the result of Trump’s attempt to challenge the non-tax increase during the negotiations. If Liu He went to the United States in early October to temporarily suspend tariffs, then Trump This round of provocation is invalid, and the Chinese side has the upper hand.
If Liu He did not suspend tariffs before the US-America negotiations in early October, the negotiations are likely to be postponed again. If the negotiations are not postponed, it may be due to the compromise of China’s position. It may also be that Beijing’s trip to the United States to reaffirm its position and kick the ball to the United States. Under such circumstances, the future rounds of negotiations between China and the United States will be idling negotiations.
