Chinese leaders ‘absolutely confused’ by Trump’s demands on trade
Donald Trump has called on China to capitulate to U.S. demands on trade. The problem is nobody knows exactly what Trump actually wants — including the Chinese.
One week, he condemns threats to American national security interests and the next, agrees to lift a ban on doing business with Chinese telecom giant ZTE. He rails about the U.S. trade deficit with China, then dismisses Beijing’s offer — negotiated by his own officials — to boost its purchases of U.S. goods by billions of dollars.
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Beyond the feints and jabs, he’s raised so many different issues that it’s hard to know what his priorities might really be.
The strategy is straight out of “The Art of the Deal”: “I aim very high, and then I just keep pushing and pushing and pushing to get what I’m after.” But some doubt that approach translates to negotiating with a global superpower. By all accounts, it has left the Chinese increasingly mystified about what Trump really wants at a pivotal moment when the world’s two largest economies are teetering on the edge of sustained trade warfare.
“They’re absolutely confused,” Derek Scissors, a resident scholar at the American Enterprise Institute, said of the Chinese.
Without clear demands, he argued, Beijing is unlikely to offer much. “The concession has to get them something. And they don’t know what they’re going to get because the U.S. doesn’t have a strategy.”
Chinese officials, for their part, are increasingly blunt about their frustration.
“We appeal our American interlocutors to be credible and consistent,” Li Kexin, minister at the Chinese embassy in Washington, said in a speech Tuesday at the Institute for China-America Studies. “When you agree, you mean it.”
And on Friday, Gao Feng, spokesman for China’s Ministry of Commerce, criticized the U.S. as “capricious.”
Trump’s aggressive approach is a reversal from more than a decade of U.S. policy toward China, which involved negotiating on a suite of business issues every year to make incremental progress. Any gains were secured largely by convincing Beijing that a more open economy was ultimately in its best interests — a tactic that worked very slowly and only to a point.
The president’s willingness to antagonize China more directly has largely been embraced by the U.S. companies and workers desperate for quicker and more substantial results. But veterans of international negotiations are skeptical that negotiations will succeed unless they’re more clearly focused.
“Yes, they have a plan. No, I don’t think it will work,” said Bill Reinsch, a senior adviser at the Center for Strategic and International Studies. “The plan is always push harder, demand everything and offer nothing.”
The underlying structure of China’s economy is the cause of many of U.S. companies’ most intractable complaints, something that won’t change in a matter of weeks or even months.
Beijing makes U.S. companies jump through more hoops than domestic companies. It conducts cyber espionage and steals U.S. trade secrets and intellectual property, like patents. And the Chinese government subsidizes its companies on a grand scale, guaranteeing that they can sell goods below a market-set price.
All of these policies have been identified by the Office of the U.S. Trade Representative as the impetus for new tariffs set to be imposed on $50 billion in Chinese goods. But across the ideological spectrum, China watchers are worried the president’s laser-like focus on the trade deficit may lead him to lose focus on seeking structural changes to the Chinese nonmarket system.
“This is a multiyear process that involves a lot of pain,” Scissors said. “If you don’t want to face the pain and take the time, then don’t do it.”
Chinese officials have similarly cautioned that this negotiation may take years.
“Let’s talk about it, no matter on trade deficit or structural issues,” Li said.
Adding to the confusion, senior administration officials have said they don’t know exactly what Trump will decide to say or do on trade at any given moment. That uncertainty has led advisers to compete for his attention in a bid to sway him, which leads to varied tactics and mixed messaging.
Officials like National Economic Council Director Larry Kudlow have indicated the goal is to knock down barriers to U.S. exports, such as tariffs. But under the rules of the World Trade Organization, China is bound to give the United States the same tariff treatment as every other WTO member, making negotiations on the reduction of duties difficult.
Meanwhile, the new U.S. tariffs, aimed at extracting concessions from the Chinese, were designed largely as a response to intellectual property theft, with a nod to China’s policy of propping up companies in particular sectors.
China responded to the announcement of those tariffs by scheduling duties on U.S. goods that mirror the size and timing of the administration’s action. On Tuesday, Trump responded by threatening to slap tariffs on as much as $450 billion in Chinese goods. The administration is also planning next week to place new investment restrictions on the Asian nation.