President Donald Trump fired off a series of tweets Monday morning to defend against criticism that he’s being too soft on China when it comes to trade.
“Why didn’t President Obama & the Democrats do something about Trade with China, including Theft of Intellectual Property etc.? They did NOTHING!” Trump tweeted. “Fair Trade, plus, with China will happen!”
Trump is on the defensive because experts, pundits, manufacturing advocates, and at least one lawmaker from his own party have suggested that Trump may have conceded too much too quickly to the Chinese during trade negotiations.
The US and China put out a joint statement on Saturday after their second round of trade talks. The talks were intended to get China to cease unfair trade practices it uses against the US and to reduce the US-Chinese trade deficit — and to sort out those differences without sliding into a trade war.
The joint statement said, among other things, that China would increase its purchase of US energy and agricultural goods and that China would change its intellectual property practices.
Critics — including some in Trump’s own party — immediately panned the statement as a sign that Trump was rolling over too quickly in talks with Beijing. “China is winning the negotiations. Their concessions are things they planned to do anyways,” Sen. Marco Rubio (R-FL) tweeted Monday morning. “In exchange they get no tariffs, can keep stealing intellectual property & can keep blocking our companies while they invest in the U.S. without limits.”
Trump is in an awkward spot. On one hand, it appears that he may have at least temporarily warded off the possibility of a trade war with the world’s second-largest economy. On the other hand, the vague terms of the agreement that are publicly known seem to suggest that Trump hasn’t managed to deliver big wins for the US despite his much-touted dealmaking prowess.
It’s actually not clear what kind of truce the US and China have formed
So far, both the agreement itself and what it means for forestalling the possibility of a trade war are not particularly clear.
The joint statement says that China will increase its purchase of US agricultural goods and energy. Trump appears particularly excited about the win for farmers, who have feared a backlash from China in the event of a trade war. “Under our potential deal with China, they will purchase from our Great American Farmers practically as much as our Farmers can produce,” the president tweeted Monday.
But experts think Trump is making a big deal out of a pretty unremarkable concession from the Chinese. What he got the Chinese to agree to is “the kind of deal that China would be able to offer any U.S. president,” Brad Setser, an expert on China at the Council on Foreign Relations, told the Washington Post.
There’s a notable absence of specifics on how many more US goods China will now purchase. Although the Trump administration said it expects China to reduce the US-Chinese trade deficit — that is, the amount by which the US’s imports from China exceed its exports to China — by “at least $200 billion,” no such figure is featured in the joint statement.
The statement is also remarkably vague about what China will do in response to the US’s accusations that China unfairly forces US companies to transfer their intellectual property to Chinese companies if they want to do business there.
“Both sides attach paramount importance to intellectual property protections, and agreed to strengthen cooperation,” the statement reads. “China will advance relevant amendments to its laws and regulations in this area.”
Analysts say it’s hard to discern what exactly China is agreeing to with language that broad. Fox Business host Lou Dobbs summed it up as a total giveaway to Beijing: “Chinese Say ‘No Deal.’”
Complicating things further, on Sunday the Trump administration sent mixed signals on whether the deal meant that the US was no longer considering sweeping tariffs on up to $150 billion worth of Chinese goods.
Treasury Secretary Steve Mnuchin said on Fox News Sunday that the administration had agree to “put tariffs on hold” and was “putting the trade war on hold.”
But the same day, US Trade Representative Robert Lighthizer released a statement implying that the US was in fact still considering tariffs as a pressure tactic against China.
“As this process continues, the United States may use all of its legal tools to protect our technology through tariffs, investment restrictions and export regulations,” Lighthizer said in the statement. “Real structural change is necessary. Nothing less than the future of tens of millions of American jobs is at stake.”
A third Trump official muddied the waters even more. When asked if Trump’s tariffs were “off the table” on CBS’s Face the Nation, National Economic Council Director Larry Kudlow said, “I don’t think we’re at that stage yet.”
The upshot of all this is that it looks like trade tensions between the US and China are cooling for now. But they could flare up at any point in the future given how ambiguous the language surrounding the agreement is.