US-China issues remain despite truce
WASHINGTON — The Trump administration and China declared a temporary truce Friday in their 15-month trade war. Yet the grievances that led them to impose tariffs on hundreds of billions of dollars of each other’s goods remain largely unresolved.
The administration agreed to suspend a tariff hike on $250 billion worth of Chinese imports that was set to take effect Tuesday. And China agreed to buy up to $50 billion in U.S. farm products.
The de-escalation in tension between the world’s two largest economies was welcomed by financial markets. The U.S.-China hostilities have alarmed investors and escalated costs and uncertainties for many businesses.
President Donald Trump announced the cease-fire in a White House meeting with the top Chinese negotiator, Vice Premier Liu He. The news followed two days of talks in Washington, the 13th round of negotiations between the two countries’ delegations.
“It took us a long time to get here, but it’s something that’s going to be great for China and great for the USA,” Trump said.
Many of the details, though, remained to be worked out. And some of the thorniest issues — such as U.S. allegations that China forces foreign companies to hand over trade secrets — were dealt with only partially, or not at all, and will require further talks.
“The president is acting as if a lot of Chinese concessions have been nailed down, and they just haven’t,” said Derek Scissors, a China specialist at the conservative American Enterprise Institute.
The negotiators have so far reached their tentative agreement only in principle. No documents have been signed.
And the threat of escalation still hangs over the two countries: Trump has yet to drop plans to impose tariffs that are set to take effect Dec. 15 on an additional
$160 billion in Chinese products. That move would extend the sanctions to just about everything China ships to the United States.
While providing scant details of what was agreed to Friday, the White House said Beijing pledged to be more transparent about how it sets the value of its currency, the yuan. The administration has long accused China of manipulating the yuan lower to give its exporters a competitive edge in foreign markets.
China has also agreed to open its markets to U.S. banks and other financial services providers, Treasury Secretary Steven Mnuchin said.
The trade war has inflicted an economic toll on both countries. U.S. manufacturers have been deeply hurt by rising costs from the tariffs and by uncertainty over when and how the trade hostilities may end. Friday’s truce at least opens the door to progress.
“They’re trying to de-escalate,” said Timothy Keeler, a former chief of staff at the Office of the U.S. Trade Representatives. “I think it serves both sides’ interests because both sides were feeling pain.”
Stock prices had been up substantially all day, mainly in anticipation of a significant trade agreement. But once the White House announced the contours of the tentative accord, the market shed some of its gains. The Dow Jones industrial average, which had risen more than 500 points at its high, closed up 319.
“This is an encouraging first phase,” said Craig Allen, president of the U.S.-China Business Council. “We await word on how implementation will be measured and in what timeframe, as well as details on scheduling subsequent phases.”