US leadership unavailable to Chinese negotiators ahead of tariff implementation

6 July 2018 10:45am
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5 July 2018. By Adam Sigal.

Senior US leadership isn’t engaged in significant talks to avert a trade war with China with tariffs scheduled to go into effect midnight Friday, MLex has learned.

The US set July 6 as the date to impose an additional 25 percent tariff on $34 billion of Chinese technology products receiving industrial support. China responded by declaring its intention to implement a similarly sized package on US goods, including cars and soybeans.

The two countries had engaged in consistent high-level negotiations this year, but those negotiations are no longer happening between senior trade officials, MLex was told. Negotiations are taking place between members of the USTR and the Chinese foreign ministry, but senior leaders in the US and Chinese government are not currently involved in negotiations the way they had been ahead of previous deadlines for the US to implement trade restrictions, one source in the Chinese government said.

A negotiated solution could still avoid the implementation of tariffs, or rescind them at any time.

Chinese officials have been frustrated by a lack of access to the individuals who have decision-making authority regarding US trade policy, one source familiar with the thinking of the Chinese foreign ministry told MLex. Chinese leaders were hoping for continued access to Secretary of the Treasury Steven Mnuchin, Secretary of Commerce Wilbur Ross and US Trade Representative Robert Lighthizer, who they see as the people able to influence the president’s actions, MLex was told.

Chinese officials have tried alternative strategies, including reaching out to other elected officials including members of Congress, as well as to US trade advocacy groups.

President Donald Trump initially directed the Office of the US Trade Representative to levy tariffs on $50 billion of imports, but after a review period the agency removed nearly $16 billion of products from the initial list. USTR is currently considering which products will be added to the list in a separate investigation to expand the US tariff package to $50 billion, and China has said if the US implements new tariffs it will also expand the scope of its tariffs to match.

Trump has said that Chinese retaliation is unacceptable to the US, and has proposed a new tariff package of 10 percent on $400 billion of imports.

The US made the decision to levy the tariffs after a yearlong investigation that found that Chinese policies negatively impact US intellectual property.