WASHINGTON -- U.S. and Chinese officials met for the 13th round of trade negotiations on Thursday as expectations rise for a limited deal that could ease tensions and address some of President Donald Trump's concerns about China's economic practices.
Trump said he would meet at the White House today with the leader of the Chinese negotiating team.
But administration officials are separately weighing options that could inflict additional economic pain on Beijing as the United States continues to look for ways to force China to change long-standing rules that have put American companies at a disadvantage.
The ideas under consideration would move the White House's negotiating tool of choice beyond tariffs toward limiting China's access to U.S. capital markets and imposing greater scrutiny on its companies, according to people familiar with the discussions.
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Administration officials, including members of the National Security Council, have begun pressing the Securities and Exchange Commission to increase scrutiny of Chinese companies. They are also looking for ways to reduce the exposure of American retirement funds to certain Chinese companies.
Many of the efforts have been proceeding independently from the trade talks and are fueled by longer-term considerations of China's economic and security threats. Some White House advisers now view the escalation scenarios as an additional lever to force China to make the kinds of deep economic concessions that have so far proved elusive in the talks, which have dragged on for more than a year.
On Thursday, Treasury Secretary Steven Mnuchin and Robert Lighthizer, Trump's top trade negotiator, greeted Chinese Vice Premier Liu He on the steps of the trade representative's office. The meetings dragged into the afternoon and at one point a black SUV was seen delivering large brown bags from Clyde's, a Washington restaurant, for a working lunch.
"Big day of negotiations with China," Trump tweeted Thursday morning. "They want to make a deal, but do I? I meet with the Vice Premier tomorrow at The White House."
A U.S. Chamber of Commerce official briefed by both negotiating teams said that the United States and China could announce a limited trade agreement this week that would prevent Trump's planned tariff increase from going into effect Tuesday and set rules around how China manages its currency.
Myron Brilliant, executive vice president and head of international affairs at the Chamber of Commerce, said a more comprehensive pact still could be announced but the scope of the deal would depend on what Chinese negotiators offer. The Trump administration also could contemplate removing the threat of additional tariffs that are scheduled to be imposed in December or roll back some of the tariffs it has already levied on more than $360 billion of Chinese goods based on what the Chinese negotiating team offers, he said.
There have been some signs of accommodation between the two countries in recent weeks. China has resumed purchases of American agricultural goods. And in what is likely to be viewed as a gesture of goodwill by the Chinese, the Trump administration plans to go ahead with approving licenses soon that will allow some companies to sell nonsensitive goods to the Chinese telecom provider Huawei, which has been blacklisted from buying American products.
But China has resisted many of the administration's demands to make more transformative changes to the way it runs its economy. Chinese officials appear unlikely to agree to the administration's long-standing demands that Beijing limit its subsidies to Chinese companies, change its policies surrounding the treatment of data or make other structural changes, people familiar with the negotiations said.
The potential for such a limited agreement has fueled private deliberations within the White House on options for escalating economic pressure on China.
Officials have held meetings in recent weeks to consider escalation options if the current round of negotiations fails to address the administration's primary concerns. Trump's top economic advisers have publicly played down the discussions, which have centered on tightening scrutiny of Chinese companies listed on U.S. stock exchanges and limiting the direct exposure of government-run retirement funds to China.
Larry Kudlow, the director of the National Economic Council, acknowledged Tuesday that the administration was looking for ways to protect Americans who were investing in Chinese companies.
"We've opened up a study group to take a look at it," Kudlow said on Fox Business Network.
Information for this article was contributed by Paul Wiseman of The Associated Press.
Business on 10/11/2019