President Donald Trump’s announcement that he would delay an increase in tariffs on Chinese goods has not set off the alarm bells among China hawks that earlier signs the administration could soften its stance on China did.
President Trump said Sunday that the U.S and China had made “substantial progress” in the trade negotiations. Many China critics in the administration and in its orbit believe this is true and cite the confidence of U.S. Trade Representative Robert Lighthizer as providing comfort that the delay is not a surrender to a Chinese strategy of delay.
Lighthizer is known as one the fiercest critics of China’s predatory mercantilism in the administration, second only to White House trade adviser Peter Navarro in his skepticism of China’s intentions and ability to arrive at a satisfactory agreement with the U.S. In the past, he has said that tariffs might need to rise to 25 percent from the current ten percent before China would make serious concessions, according to people familiar with the matter.
His reassurance in public appearances last week that talks were making progress helped ease fears that the U.S. could give in too easily in an effort to appease corporate interests in the U.S. who have been lobbying the administration not to raise tariffs on China.
Beijing has recently offered to increase purchases of U.S. farm and energy products and allow more access to Chinese markets by U.S.financial companies. But those offers are considered to be dangerous at best, attempts to lure America into an almost colonial relationship with China, according to a person familiar with the thinking of China hawks inside the Trump administration.
“They want to turn the U.S. into an agricultural tributary of China. Half of the Trump administration would cave to China on technology in exchange for soybeans,” said one former administration official.
The crucial sticking points are China’s state subsidies to its “national champion” companies and support for state-owned enterprises. Beijing views these as central to its plans for future economic development. Negotiations may still collapse because of China’s unwillingness to give ground on these issues, which Beijing sees as necessary to preserve the Communist Party’s absolute dominance in the country.
“It is better to delay now than cut a bad deal that doesn’t deal the central issues of technology, joint ventures, and state subsidies,” one former administration official said.
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