Todd Bishop
On the 5th, on September 5th, US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin called Chinese Vice Premier Liu He. It was decided to postpone the planned 13th round of trade negotiations in September until the beginning of October, in Washington.
On September 3, Liu Heying met with the co-chairman of the US Senate Working Group, Senator Steve Daines and Senator David Perdue. Liu He mentioned to the two Republicans that China firmly opposes the trade war, which is not conducive to China, not to the United States, and not to the entire world. China hopes that the two sides will deepen mutual understanding, seek common ground while reserving differences, and properly solve problems on the basis of equality and mutual respect.
This is a way for the Chinese government to express information to the Republican and Republican governments in the United States. The Trump Republican government has determined that China intends to delay negotiations until the end of the 2020 general election. Trump believes that the United States has a favorable position in the trade war and the US economy has not lost much, so it dares to “pull down” with China. However, with the recent forecast of a series of economic data, more and more people in the US ruling Republican Party and the Trump campaign strategy team support the agreement as soon as possible, so as not to damage Trump’s prospects for re-election in the 2020 election.
The US media concerned about Danes and Perdue noted that Liu He strongly emphasized the equality and mutual respect of the negotiations. According to Bloomberg News, because the United States refused to postpone the tariffs in early September, it would be very difficult for the United States to hold trade negotiations with China in September. This is one of the reasons why trade negotiations were postponed in October.
The president of the American Chamber of Commerce, Thomas J. Donohue, is influential in Washington and has always reflected the voice of the American business community. In an interview with the US Consumer News and Business Channel (CNBC) on September 3, he mentioned that if the United States postpones or cancels the new tariff increase plan in September, China has long promised to hold talks in September. However, the White House’s strategy is to remain the same, otherwise the new changes will only make the United States lose its chips at the negotiating table.
Negotiations in early October were just over two months from the July Shanghai trade negotiations. During this period, the Trump administration imposed a 10% tariff on China’s more than $300 billion in goods, which were implemented on September 1 and December 15, respectively. As a counter-measure, China will impose a tariff of 5% and 10% on US$75 billion of US goods. The other part includes tariffs on products such as notebooks and mobile phones, which are expected to be imposed on December 15.
Public opinion in the United States believes that in the case of new tariffs and new tariff threats, the two sides must have changed in the sincerity and content of the negotiations. Previously, China and the United States had reached some preliminary agreements, specifically agricultural product purchase agreements, agreements to relax or cancel restrictions on ZTE and Huawei, rather than comprehensive trade agreements. If the October negotiations continue to focus on fixed issues such as the purchase of agricultural products and continue the number of roads negotiated in Shanghai, there may be no breakthrough.
Republican strategist Doug Heye has been visiting trade-affected agricultural areas such as Iowa and Missouri. He noticed that Trump’s supporters value Trump’s tough stance on China on the one hand, but on the other hand, they actually felt the negative impact of the trade war. This is one of the reasons why Trump and his aides have been optimistic about the recent external performance. The purpose is to give voters the impression that “the United States is winning this trade war.”
However, the two sides have already negotiated 12 rounds. The differences have not only been closed, but they have also added new contradictions and mutual distrust. The possibility of an agreement between the two sides is getting smaller and smaller, unless the United States makes concessions and seeks a discounted agreement. .
Walter Lohman, director of the Trump think tank and the Center for Traditional Studies in Asia, predicts that the Trump administration may seek an agreement with China around Christmas to end the trade war by 2020. The trade war has hurt American consumers, American manufacturing and farmers more than Trump’s estimate.
If it enters 2020, with the start of the bipartisan candidate campaign, it will be more and more difficult for the Trump administration to reach an agreement with China. Because, to a certain extent, in order to reach an agreement, the need for the United States to make concessions on policy is greater than that of China. But if the United States makes concessions, Trump is bound to be “weak” by the Democratic Party. The Democratic Party has always insisted on tough on China on trade issues, but it is not achieved through rough means such as the addition of tariffs.
The White House’s tariff policy is erratic, leading to increased uncertainty and a decline in US domestic consumer spending. According to data released by the University of Michigan on August 30, the final value of the US consumer confidence index in August fell by 8.6 to 89.8 month-on-month, the largest monthly decline in eight years, bringing more worries to the slowing US economy. If this economic momentum continues into 2020, the Democratic Party will naturally pursue it in Trump’s “tariff trade war.”
Some Republican analysts who have studied campaign strategies believe that the Democratic Party supports a tough trade policy toward China but opposes tariff increases. If Trump makes concessions on the tariff issue, it will not only help to reach an agreement, but the Democratic Party will not make a fuss about it. As an article by American columnist Thomas Friedman said, if Trump wants to win with China’s top leader Xi Jinping, then don’t blindly pursue the “perfect” agreement, but should focus on some Real trade progress is achieved, thus alleviating each other’s pressure. So, the key is how Trump balances the interests between trade negotiations and his own re-election.
