US is stopping trade talks

The US is stopping trade talks with China

President Trump’s negotiating strategy requires him “to condition expectations with the American people and ask them to sacrifice,” an expert says.

By Alex Ward

The Trump administration won’t participate in trade talks with China until Beijing makes huge concessions, the latest salvo in the months-long trade war that could threaten global economic growth.

For years, the US has complained American companies can’t fairly compete in China’s market, in part because Beijing forces foreign businesses to hand over their proprietary technology to enter it. That gives Chinese companies an advantage, many experts say, as they can steal the intellectual property US businesses spent years developing.

So before the US and China negotiate any further, Washington is demanding that Beijing stop insisting on technology transfers, the Wall Street Journal reported on Thursday, as well as other economic grievances.

That practice was one of the reasons President Donald Trump started his trade war with China this year. So far, America has placed about $200 billion worth of tariffs on Chinese goods, in part to make Chinese products more expensive so Americans don’t buy them. But Beijing has responded to the tariffs in kind, and made it even harder for US companies to sell in the Chinese market.

Both sides engaged in two rounds of trade talks to solve the trade dispute, but they have since reached an impasse. Discussions were canceled in September after the US placed more tariffs on Beijing, but now it seems China wants those talks to restart.

The US has repeatedly declined, the Wall Street Journal noted, insisting that China cave to its demands. That means a planned discussion between Trump and Chinese President Xi Jinping during November’s G20 summit may become a tense affair.

Ryan Hass, a top China official on the National Security Council from 2013 to 2017 now at the Brookings Institution in Washington, thinks the American approach to the trade talks won’t work, mostly because China won’t cave to US demands for some time.

“If President Trump’s strategy is to enter into a political and economic pain tolerance test with Xi Jinping, he is going to need to condition expectations with the American people and ask them to sacrifice,” he told me.

The office of the US Trade Representative, which leads trade talks with Beijing, didn’t immediately return a request for comment.

Trump seems to be trying to crush China’s economy

Experts say the US president is the reason Washington and Beijing have yet to reach an agreement, even after months of talks.

“Twice now the Chinese have thought that they had a deal,” Bonnie Glaser, a China expert at the Center for Strategic and International Studies, told me in September, “but then it fell through when it went to the president.”

That’s led to some negative perceptions in Beijing. “China is convinced that Trump is not looking to resolve the trade dispute,” Daniel Russel, the State Department’s top Asia diplomat from 2013 to 2017, told me last month. Instead, he says, the Chinese feel Trump is merely using trade issues as a way “to undercut China.”

According to multiple sources, Trump’s goal is to severely hurt China’s economy, mostly by making it so hard for companies to do business there that they go elsewhere. The tariffs are one way to do that.

It helps explain why Trump is in no rush to solve the trade dispute even though top economists say it will hurt the global economy.

This month, the International Monetary Fund (IMF) — a world body that helps keep the global economy stable — released a major report that projected the world’s economy will grow by 3.7 percent, which is 0.2 points lower than they had estimated in April. That’s the same rate of growth as 2017, signaling a slight slowdown — and Trump’s trade policies are a major reason why.

The IMF also noted that the trade war could curb China’s economic growth by about 2 percent over the next two years. If true, it would be a major blow to China’s economy, which prioritizes continued growth above all else.

That, more than anything, may be why the US is playing hardball — and why Trump will likely do so again at the G20 summit.