U.S. and China to discuss trade, TikTok ‘in the coming days’

Foreign Affairs

Washington and Beijing are expected to talk about the phase one trade deal soon, but the conversation will not be limited to trade.

chinese ministry of commerce
China's Ministry of Commerce spokesperson Gao Feng attends a news conference at the commerce ministry in Beijing, China, June 19, 2018. REUTERS/Thomas Peter

Two days ago, President Trump declared that he had “canceled” a six-month review of the phase one trade deal with China, originally scheduled for August 15, adding, “I don’t want to talk to China right now.”

Since then, Trump changed his mind — his aides kindly clarified to the Wall Street Journal that he “wasn’t talking specifically about the Phase One deal, but more generally” — and now both sides have confirmed that talks are back on.

  • China’s Ministry of Commerce said today (Chinese, English) that the talks would occur “in the coming days” (将于近日 jiāng yú jìnrì), though a date has not yet been announced.

The talks won’t be confined to trade: Beijing plans to bring up Trump’s attacks on TikTok and WeChat in the discussions, Bloomberg reported last week.

  • Those would be heated topics of discussion — the Chinese Foreign Ministry recently accused Trump of “digital gunboat diplomacy” over the forced sale of TikTok. Beijing may also be feeling the heat from a nationalistic backlish over the way TikTok’s owner, ByteDance, was perceived to “surrender” under U.S. pressure.
  • Trump “probably would like to deny China some of the proceeds of the TikTok sale,” White House economics advisor Larry Kudlow said today, not even trying to cover up the extortion. (The irony is that 70% of ByteDance’s outside investors are in the U.S., and they “stand to make a fortune on any sale” even without Trump’s strong-arming).
  • We don’t know if Beijing would also bring up Huawei in these discussions — the latest, and most severe U.S. Commerce Department restrictions on the company were just announced three days ago.

Even restricted to trade, the talks are tricky: Falling commodity prices amid a global pandemic mean that the purchase targets — all set in dollar terms, not volume — are far above what Beijing has fulfilled, the WSJ points out.

  • “Is the phase one trade deal in jeopardy if China can’t make enough purchases during a pandemic?” is a question we have been asking since May. The answer is still unclear — Trump could end up declaring a win for “Great Patriot Farmers,” even if the deal as a whole only sees partial success because of global economic upheaval.

What to expect from both sides

When the talks do happen, whatever their outcome, Trump will probably dial up the drama as much or more than he did with previous rounds of negotiations. His obsession with being seen as the sole dealmaker or deal breaker is more important than ever this close to an election.

Beijing, meanwhile, will likely be cautious, at least for now. Chinese officials are probably waiting until at least after these talks to announce any retaliation for the Trump administration’s moves against TikTok, WeChat, or perhaps most importantly, Huawei. “Huawei is an important company, but Beijing is engaged in an aggressive campaign to sweet-talk big American firms to stay in China,” the analyst Dan Wang wrote, per the SCMP.