China is said to have outlined a few concessions for the Trump administration to consider, in an effort to diffuse the quickly escalating trade war between Beijing and Washington. But it’s still going to be a long road, as the concessions will fall short of president Donald Trump’s demands.
According to three people familiar with the discussions, the talks are constructive and ongoing, as reported by Bloomberg. One of the people said that it raised doubts over how substantive a deal Trump could make with Chinese counterpart Xi Jinping when the two leaders meet later this month on the sidelines of the Group of 20 summit (G20) in Buenos Aires, Argentina. Two other people familiar with the ongoing talks also said that the Chinese offer was a sign of what they characterized as “constructive discussions” between the two sides ahead of the planned G20 meeting between the two leaders.
Treasury Secretary Steven Mnuchin and Xi’s main economic emissary, Liu He, spoke last Friday for the first time in months. Since then, lower-level discussions have been held and Larry Kudlow, the head of Trump’s National Economic Council, on Tuesday said the two capitals were in touch “at all levels,” Bloomberg further reported.
The trade war has already started to affect businesses and the costs of goods in the United States. From layoffs to higher prices, and food spoiling, Americans have felt the pinch. Coupled with rising interest rates, the trade war has been a recipe for economic disaster.
But the battle to end the disastrous trade war has only just begun. Mnuchin is seen as an advocate within the administration of a deal, while others such as Robert Lighthizer, the U.S. trade representative, have been pushing to continue raising pressure on Beijing to try to force the Chinese to make “more meaningful reforms.”
“Mnuchin and Kudlow cannot create a trade deal. They are not capable of it,” said Derek Scissors, a China expert at the conservative American Enterprise Institute, who pointed to the two men’s lack of experience in difficult trade negotiations. “Until I see Lighthizer ordered into the fray I don’t think there will be a trade deal,” Scissors added.
And the longer the trade war goes on, the less optimistic many have become about the ruling class ending the pressure on our wallets.