China Trade Deal May Never Happen, White House Economist Warns

Cheryl Sanders
July 10, 2019

Terms of Trade is a daily newsletter that untangles a world embroiled in trade wars.

The US and China are set to relaunch trade talks this week after a two-month hiatus, but a year after their trade war began, there is little sign that their differences have narrowed.

Members of the US trade delegation Robert Lighthizer and Steven Mnuchin arrive at a hotel in Beijing, China March 28, 2019.

The top US and Chinese trade envoys have talked by phone in their first contact since Presidents Donald Trump and Xi Jinping agreed to resume stalled talks on ending a tariff war.

Washington officials say US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin held a phone conference with China's Vice Premier Liu He and Commerce Minister Zhong Shan.

Dr Scissors, who has at times consulted with Trump administration officials, said both sides got what they wanted out of the Summit - a lowering of the temperature and the avoidance of new tariffs that would have been painful for both sides.

Nonetheless, after the meeting with Chinese President Xi Jinping over the latest G20 summit in the Japanese City of Osaka, Trump had agreed to cancel a tariff hike on all Chinese imports, untouched by trade spat so far, worth of $300 billion, meanwhile, Chinese President had also agreed to purchase some U.S. agricultural goods.

The announcement of the talks came after China criticized the US and its officials this week for agreeing to sell arms to Taiwan, which China regards as part of its territory, and for meeting with a Hong Kong newspaper publisher who's an outspoken critic of Chinese rule.

A United States official confirmed the call and said the continued negotiations were aimed at resolving the outstanding trade disputes between the two countries. "Hopefully we can pick up where we left off but I don't know that", he told reporters Tuesday.

White House economic adviser Larry Kudlow on Tuesday said China was expected to move forward with agricultural purchases from the United States even as trade talks resumed between the two countries, with top officials slated to talk by phone this week.

The United States and Chinese trade representatives held a "constructive" telephonic conversation on Tuesday, Larry Kudlow, the White House economic adviser said it marked the latest round of dialogues between two sides since the world's two largest economies are struggling a year-long trade war, exhausted of what they reached an agreement to a tariff truce.

After his meeting with Xi in Osaka, Trump said he would refrain from imposing tariffs on more Chinese products.

Talks had broken down in May over USA accusations that Beijing had reneged on its commitments, and the dispute escalated with the two sides exchanging steep increases in punitive tariffs. He had previously threatened to put punitive duties on an additional $300 billion in Chinese exports.

However, Kudlow emphasized that the US government will not buy Huawei parts, components or systems.

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