Hooray! "Substantial" Progress With China (Just Don't Ask Where)

-edited

Trump announced substantial progress but trade experts wonder where.

The Wall Street Journal reports Trump to Delay Tariff Increases on Chinese Imports.

President Trump said Sunday he would delay an increase in tariffs on Chinese goods set to take effect at the end of this week, citing “substantial progress” on issues including intellectual property and technology transfer after a weekend of talks.

In recent talks, Beijing offered to increase purchases of U.S. farm and energy products and services, ease restrictions on U.S. firms in financial services and auto manufacturing and improve protection of U.S. intellectual-property rights, according to people briefed on the discussions.

But China’s leadership sees all those measures as aligned with the nation’s own interests. Beijing so far hasn’t given much ground on issues it sees as crucial to maintaining the Communist Party’s rule, including government subsidies and support to state-owned companies and other policies that underpin its state-led economic model.

“Trump has now substantially ratcheted up the pressure on his negotiators to strike a deal with China, even if it does little to assuage U.S. hard-liners’ concerns about China’s commitments on core structural issues,” said Cornell University China expert Eswar Prasad. “There is still a yawning gap between the two sides on major issues due to U.S. lack of trust in China’s commitments on structural issues and China’s unwillingness to make any fundamental changes to its industrial and economic strategies.”

Divisions also remain on how to address U.S. complaints that Chinese authorities and companies pressure U.S. companies to share technology. Chinese officials deny that Beijing applies such pressure and argue that foreign firms voluntarily share technology in exchange for access to China’s markets.

The two sides also haven’t agreed how to enforce any deal. U.S. officials, who have for years complained about China’s poor follow-up record, are pushing for provisions that would either permit Washington to reimpose tariffs on Chinese goods should Beijing fail to meet certain milestones—called “snapback” in trade lingo—or leave the levies in place and gradually remove them if Beijing meets agreed-upon yardsticks.

Tariff Man

If we are any better off now than where we were before Trump aka Tariff Man started firing tariff missiles around the globe, please let me know where.

Perhaps something does come out of this. But so far Trump has not made any trade deals better than the ones already in place. USMCA is no better than NAFTA, and arguably worse.

It does not appear China is doing more than it would have with much less bravado.

Importantly, Trump is under pressure from farm states. He desperately needs a deal. China understands that full well.

Mike "Mish" Shedlock

Comments
No. 1-7
Irondoor
Irondoor

Trump actually said that the tariffs were costing China $100 billion, which he would use to reduce the Deficit. Many people misunderstood that and interpreted it to mean reducing the US Government's financial deficit. I assume he realizes the any tariffs are basically a tax on the buyer of the product (American consumers) and doesn't actually cost the seller any cash? I'm not so sure he understands it. And no, I'm not neglecting the fact that tariffs reduce demand for a Chines product and supposedly the consumer is either wiling to pay the higher price as it is passed on to him, or he will seek a substitute that is made in the US.

But, if there is no acceptable substitute produce made in the US and the consumer buys one made in any other foreign country, we have merely exchanged a Chines trade deficit $ for country X trade deficit $.

In the end, Trump will fold and the tariffs will come down and he will announce a "big beautiful deal" to be signed while seated on his gold-plated toilet in Mar A Lago. He needs it to do two things: Keep the stock market up (his main success measuring tool) and have a positive to report to the farm belt and the coming Presidential campaign.

China will get what it wants, because it usually does.

Stuki
Stuki

In sort of a replay of Ronny and Maggie running around running up deficits while wearing Adam Smith badges; Donny and Tessie looks to have similarly found eachother, playing "cook up weekly deadlines we can then postpone for anothwer week to great public fanfare...." The "special relationship," I suppose...

frozeninthenorth
frozeninthenorth

Could this be his "game show" persona revealing itself? Create a crisis and then solve it -- for a lot of Trump supporters that more then enough, and it will resonate that way on Fox -- which is the only outlet that counts for the President.

As it was said above Xi can see the man, and the intention and insure that Trump gets what he wants/needs, as long as China's own interest is not affected. I will bet you that next week America will declare that Huawei is in no breach and that the CFO will no longer be deported to the US

magoomba
magoomba

I will miss affordable, high quality Chinese product.

themonosynaptic
themonosynaptic

Trump is a godsend for Xi - as long as Trump is in power and roundly despised in the U.S. and around the World, Xi can point to Trump and his attack on their trade as the reason for any weakness in the Chinese economy. All the Chinese need to do is wait Trump out, blame him for everything, punish his supporters, and laugh at America. And it's working, as anybody could have told the MAGA crowd 2 years ago ... and we did, but they think they are smarter than everybody else and Trump is playing 4D chess.