LOS ANGELES, CA — The Trump administration’s top economic officials will go to China this week with a mandate to “fight like hell” to get China to open its markets and give up its predatory trade practices, according to someone briefed on the matter.
The team President Donald Trump dispatched includes two Cabinet members, Treasury Secretary Steven Mnuchin and Commerce Secretary Wilbur Ross, as well as the president’s chief economic advisers, Larry Kudlow and Peter Navarro. U.S. Trade Representative Robert Lighthizer is also headed to China.
“This is the big guns, the super-team, the Trade Avengers,” the person said. The source spoke on the condition of anonymity because he was not authorized to discuss the matter.
The administration has tried to downplay expectations for the China trip, but internally, it views this as the last push to rein in China’s rogue trade practices before it hits the nation with billions of dollars in tariffs.
The push for a trip to China originally came from Mnuchin, according to people familiar with the matter. He has sought a larger role in the administration’s dealings with China. Lighthizer initially opposed sending a high-level delegation to China, arguing that the U.S. would have a stronger negotiating position after the tariffs had kicked in.
Along with Kudlow, Mnuchin is expected to play the “good cop” role in negotiations, with trade hawks Lighthizer and Navarro playing the “bad cop.” The addition of Ross tips the balance of the team slightly in favor of the trade hawks.
The administration wants China to bring down the trade deficit by 20 percent, or around $100 billion dollars. Currently, the U.S. runs a trade deficit in goods with China of about $500 billion. Just as important, according to administration officials, is getting China to allow U.S. businesses to operate in China and sell into the Chinese market without having to partner with a Chinese company, something the administration views as facilitating the transfer of U.S. technology and know-how.
“If this team doesn’t make progress, the sanctions will hit. There’s no next meeting or higher level. China cuts a deal with the Trade Avengers or we tariff their exports,” the person briefed on the plans said.
Commerce’s Ross took a tough stance Tuesday at the Milken Institute Global Conference in Los Angeles, saying the U.S. needed to show a willingness to “absorb a little bit of pain” to force China to change its ways.
“If you don’t take some risks and you don’t show you are willing to absorb a little bit of pain, how on earth are you going to get things changed?” Ross said. “If you just do nothing, we know how that turns out: more and more trade deficits.”
The size of the team headed to China is intended to convey to China the seriousness of the threat of tariffs. Some in the administration worry that the Chinese could view fractious American politics as undermining the will to bring China into line.
“They’ve got to know this isn’t a bluff, that the free-traders in the U.S. aren’t going to stop the sanctions and bail out China. Their time is up,” the person said.
The New York Times recently reported that China plans to rebuff the administration, but administration officials remain hopeful that they will be able to bring China around to opening its markets. When asked about the New York Times story on Tuesday, Ross joked that the paper’s journalists “must have psychic powers” enabling them to read the minds of Chinese officials.