Pacific Reset, day 211: With Trump, trade deficit returns to the forefront of negotiations | Politics News | SupChina

Pacific Reset, day 211: With Trump, trade deficit returns to the forefront of negotiations

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Yesterday, we noted that with the tweeter-in-chief’s signal that he is willing to meet directly with Xi Jinping at the close of the 90-day negotiation period, Trump effectively took back the position of chief trade negotiator that he had delegated to Robert Lighthizer.

The White House released a transcript of “Remarks by President Trump in meeting with Vice Premier Liu He of the People’s Republic of China.” It contains many interesting tidbits, including a readout of a letter from Xi to Trump, in which Xi says he hopes to “step up consultations by meeting each other halfway in order to reach an early agreement,” and adds a dash of flattery:

As I often say, I feel we have known each other for a long time, ever since we first met. I cherish the good working relations and personal friendship with you. I enjoy our meetings and phone calls in which we could talk about anything.

The transcript also includes, the SCMP notes, flattery from Trump describing Liú Hè刘鹤 as “truly one of the most respected men in Asia, one of the most respected men in all of China, and, frankly, one of the most respected men anywhere in the world.” Trump also calls the Chinese purchase of 5 million tons of soybeans a “fantastic sign of faith.” (This is less than a third of the estimated 18 million tons that American soybean farmers missed out on selling to China due to tariffs in 2018.)

Moreover, when asked if the Huawei case was discussed during negotiations, Trump responded, “No, we haven’t discussed that yet. It will be, but it hasn’t been discussed yet.”

In addition, the White House released a “Statement of the United States Regarding China Talks.” This is more substantive. The statement lists seven points of negotiation clearly reflecting the agenda of U.S. Trade Representative Robert Lighthizer. In short:

  1. Technology transfer
  2. Intellectual property
  3. Obstacles for American business in China
  4. Commercial cyber theft
  5. Subsidies for SOEs
  6. Obstacles for American trade to China
  7. Currency concerns

But then the statement separately emphasizes reductions to the trade deficit, reflecting Trump’s focus:

The two sides also discussed the need to reduce the enormous and growing trade deficit that the United States has with China. The purchase of United States products by China from our farmers, ranchers, manufacturers, and businesses is a critical part of the negotiations.

Another sentence in the statement seems to put all seven of Lighthizer’s substantive negotiating points on effectively equal footing with deficit reduction: “The United States is particularly focused on reaching meaningful commitments on structural issues and deficit reduction.”

Xinhua was more than happy to, in its own report on negotiations, refer to the deficit first in its list of issues discussed: “The two sides held candid, specific and constructive discussions about issues of common concern, which included trade balance, technology transfer, protection of intellectual property rights and a two-way enforcement mechanism, as well as other issues of concern to the Chinese side.”

Other news related to the trade war, and broader recalculation of relations with Beijing led by (but by no means limited to) the U.S., which we are terming the Pacific Reset:


Previously in SupChina’s trade war coverage:

Don’t hold your breath for a deal — Pacific Reset, day 209

Lucas Niewenhuis

Lucas Niewenhuis is an associate editor at SupChina who helps curate daily news and produce the company's newsletter, app, and website content. Previously, Lucas researched China-Africa relations at the Social Science Research Council and interned at the Council on Foreign Relations in New York. He has studied Chinese language and culture in Shanghai and Beijing, and is a graduate of the University of Michigan.

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