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February 11, 2019

China Talks Continue, But President Trump Won’t Meet With Chinese Counterpart This Month

In his State of the Union address last Tuesday evening, President Donald Trump promised to press China to make “real, structural change to end unfair trade practices” and end the “chronic” trade deficit between the two countries. Later in the week, however, the president said he would not meet with Chinese President Xi Jinping this month to discuss trade between the two countries. The week before, President Trump said he would meet with Xi before the White House’s March 1 deadline to reach a deal to avoid higher tariffs on $200 billion in Chinese products entering the United States. The U.S. president did say, however, that he might be willing to extend the March 1 deadline “if progress is being made.”

To that end, U.S. Treasury Secretary Steve Mnuchin and U.S. Trade Representative (USTR) Robert Lighthizer will be in Beijing on Thursday, Feb. 14 and Friday, Feb. 15 to engage in negotiations with their Chinese counterparts. In addition to Secretary Mnuchin and Ambassador Lighthizer, the U.S. delegation will include USTR Chief Agricultural Negotiator Gregg Doud, Treasury Undersecretary for International Affairs David Malpass, U.S. Agriculture Undersecretary for Trade and Foreign Agricultural Affairs Ted McKinney, U.S. Commerce Undersecretary of Commerce for International Trade Gilbert Kaplan, Deputy Director of the National Economic Council Clete Willems; and U.S. Department of Energy Assistant Secretary for Fossil Energy Steven Winberg.

In related news: a study released last week by the Institute of International Finance found the 25 percent tariffs imposed in the summer of 2018 on more than 1,000 ($50 billion) Chinese products reduced both the value and volume of those products imported from China. Ten percent tariffs on another $200 billion in imports that took effect in late September had less of an impact and also led to a well-documented surge in imports before those tariffs took effect. Calling the tariffs’ effects “muted,” IIF researchers Sergi Lanau, Gene Ma, and Greg Basile said, “U.S. importers are using fewer Chinese goods, while Chinese exporters are partially lowering prices to offset tariffs.”

The IIF study also found that the tariffs had done little to reduce the U.S.’s trade deficit with China, amid retaliatory duties from Beijing and “a large reduction in China’s imports from the U.S.’’