WASHINGTON -- President Donald Trump emerged from a June meeting in Japan with Xi Jinping, the Chinese president, saying that China would immediately begin purchasing American farm products in return for a trade truce that would forestall more United States tariffs on Chinese goods.
China did not see it that way. People familiar with the negotiations say China has denied making any explicit commitment to buy U.S. farm products during those discussions and instead saw large-scale purchases as contingent on progress toward a final trade deal that is still nowhere in sight.
That is raising questions among trade experts about whether the United States gave up more than it got during Trump's recent efforts to de-escalate the trade war.
Trump agreed to delay imposing tariffs on another $300 billion worth of Chinese imports and said he would ease restrictions on Huawei, the Chinese telecom giant blacklisted in May by the Commerce Department. In exchange, Trump said China would snap up U.S. farm products.
"China is going to be buying a tremendous amount of food and agricultural product, and they're going to start that very soon, almost immediately," Trump said on June 29. "We're going to give them lists of things that we'd like them to buy. Our farmers are going to be a tremendous beneficiary."
But Beijing has yet to engage in any large purchases of American farm goods since the meeting. Two people familiar with Chinese economic policymaking said China did not believe that an explicit agreement had been struck for specific farm purchases.
On Tuesday, Larry Kudlow, a chief White House economic adviser, said the U.S. expected China to begin making purchases of soybeans, wheat and potentially energy products, but acknowledged they had yet to materialize.
"The president, in a good-faith showing, has indicated that we will cease any new tariffs, any new tariffs," Kudlow said. "Now, President Xi is expected -- or we hope, in return for our accommodations -- to move immediately, quickly, while the talks are going on, on the agriculture front. It's good faith, but it would be real transactions."
"Haven't seen them yet, by the way," Kudlow added. "But, yes, that was part of the conversation."
It appears to be just the latest snag in a drawn-out negotiation between the United States and China. And it suggests that, despite descriptions of progress by U.S. officials, a protracted trade war that has rocked global markets and clamped down on trade between the world's two largest economies is likely to continue for the foreseeable future.
Beijing continues to push for the United States to remove the tariffs it has placed on $250 billion worth of Chinese products up front and let China carry out changes to its intellectual property laws and other regulations more gradually, people with knowledge of the talks say. The Trump administration has insisted that its tariffs remain while China makes the promised changes, but it is also eager to find a solution where China will move ahead with large purchases of agricultural goods.
Negotiators from the two countries are continuing to work toward a deal, and large-scale purchases could still happen. On Tuesday, Robert Lighthizer, the U.S. trade representative, and Treasury Secretary Steven Mnuchin spoke with China's vice premier, Liu He, and its commerce minister, Zhong Shan, to keep talks going, according to a senior administration official.
U.S. officials also said Tuesday that they were already going ahead with part of what Trump described as his concession: relaxing a ban on Huawei, which the United States cut off from buying American technology over national security concerns.
Trade talks with China came to a halt in early May, when Chinese negotiators said they could not accept some provisions that had tentatively been agreed to in a draft pact. The United States accused Beijing of backtracking. Both sides immediately escalated their trade war, with Trump raising tariffs on $200 billion worth of goods and threatening to tax nearly all Chinese imports. China retaliated with higher tariffs on American goods.
The prospect of a prolonged trade conflict has shaken stock markets and Trump's political base heading into the 2020 election. So hopes were high when Trump emerged from a meeting with Xi in late June with a temporary truce.
The president has been eager to reduce the trade war's pain on U.S. farmers, who send about one-third of their crops to China. Farmers are an important source of political support for the president, but they have been battered by the conflict in which the United States has ramped up tariffs on China.
China has placed retaliatory tariffs on American products, including soybeans. And Beijing has directed its state-owned companies to start and stop purchases of American products as a lever in the conflict. Its huge state-owned agricultural trading companies, which handle food imports, have been shifting their orders to other countries, like Brazil.
In the days leading up to the meeting between Trump and Xi in Osaka, China made large purchases of soybeans as an apparent goodwill gesture. On June 28, the U.S. Agriculture Department announced that Chinese importers had bought 544,000 tons of soybeans, the largest sale to China since late March.
Business on 07/11/2019