Trade Negotiations with China Are Still On, After Trump’s Tariff Threat

May 6, 2019 (EIRNS)—In the trade and economic negotiations which many hoped to bring to a successful end this week, both China and the United States appear to be in strong positions. As EIR has previously reported, China’s accelerated credit issuance, targeted at infrastructure expansion and at projects and trade with Belt and Road countries, has boosted both its own economy and, through a big trade improvement, that of President Donald Trump’s United States.

Thus the Twitter threat of more tariffs by President Trump at midday Sunday, does not seem likely to cause China to agree to more economic and trade changes than it has already made. Trump tweeted:

“For 10 months, China has been paying Tariffs to the USA of 25% on 50 Billion Dollars of High Tech, and 10% on 200 Billion Dollars of other goods. These payments are partially responsible for our great economic results. The 10% will go up to 25% on Friday....”

The message went on to threaten tariffs on the rest of China’s exports to America as well, those not yet hit with new tariffs. It clearly was intended to mean, “Full agreement must be reached by Friday,” May 10.

There was immediate and intense speculation that China’s 100-person delegation would not come to Washington this week. But Chinese Foreign Ministry spokesman Geng Shuang told reporters this morning that a delegation is “preparing to travel to the U.S. for trade talks.” Global Times editor Hu Xijin tweeted, “This should be seen as a gesture of good will by China.” Despite this, anonymous reports filled the media that the delegation would be downsized or—more critically—not headed by Vice Premier Liu He, whom Geng did not name.

Senate Minority Leader Chuck Schumer’s Twitter message yesterday immediately followed Trump’s:

“Hang tough on China, President @realDonaldTrump. Don’t back down. Strength is the only way to win with China.” There had been a cacophony of charges from Members of Congress in both parties and from financial media, that China was “reneging” on agreements and the Trump team was “backing down,”

etc.

At the same time, the Washington Post’s lead editorial Monday May 6 reported (or proposed) a new U.S. demand. While acknowledging China’s accommodations on the trade balance, its new intellectual property law, and its allowing U.S. firms to have full ownership of their subsidiaries in China, the Post pronounced that “only structural reforms”—changes in China’s economy—count. It demanded one not previously heard in these negotiations: that U.S.-based IT firms get full ownership of the data they collect on Chinese citizens—“for artificial intelligence purposes”!—and the free right to ship this data back to their parent companies Alphabet/Google, Facebook, Amazon, etc. which would directly violate well-known Chinese law.