On July 30, 2019, the United States and China opened a new round of trade negotiations designed to improve the two countries’ trade relationship. The talks were the first face-to-face negotiations between the countries since President Trump and Chinese President Xi Jinping agreed in June to re-start stalled trade talks. The talks -- attended by United States Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin -- were intended to re-build trust between the two countries.
The talks began with the expectation that both countries would undertake conciliatory gestures to reduce tensions. Specifically, at the talks, China was expected to agree to increase its purchases of U.S. agricultural commodities, the United States was expected to remove or reduce U.S. export restrictions on Huawei Technologies Co. Ltd., and China was expected to agree to improve its protection of intellectual property rights of non-Chinese companies. Although these issues have been addressed in prior talks between the United States and China, both sides entered the new round of talks without a draft agreement to work from.
After beginning on a positive note, the talks ended with tough rhetoric from both sides, indicating that there remain significant issues between the two countries. While the talks were on-going, for example, President Trump tweeted that China appeared to be backing off of its pledge to increase purchases of U.S. farm goods. The President threatened that, if China tried to stall negotiations in the hopes that Trump would not be re-elected in 2020, any deal would be much “tougher” on China or there might be “no deal at all.”
Chinese media outlets also took a confrontational approach. An editorial in the Global Times, China’s national paper, warned that “the U.S. has to change its bad habit of using tough talk to cheer on its negotiating team, which easily undermines the mutual trust between China and the U.S.” In addition, the People’s Daily newspaper, which is the Chinese Communist Party’s primary news outlet, stated that U.S. trade negotiators should “consult with sincerity,” and not “make trouble out of nothing”.
Despite the adversarial posturing, both China’s Ministry of Commerce and the White House described the talks as “constructive.” Little progress was made on the fundamental issues between the two parties, however. The next round of negotiations will reportedly take place in Washington in early September. In light of the substantial issues that remain, the likelihood of a quick resolution of the trade war remains low.
Trade tensions between the two countries were further exacerbated on August 1, 2019, when President Trump announced that he would impose a tariff of 10 percent on $300 billion worth of imports from China. Industry representatives in the United States responded negatively to the announcement. David French, Vice President of Government Relations at the National Retail Federation, said that “{w}e are disappointed the administration is doubling-down on a flawed tariff strategy that is already slowing U.S. economic growth, creating uncertainty and discouraging investment. These additional tariffs will only threaten U.S. jobs and raise costs for American families on everyday goods.” Similarly, Matt Priest, head of the Footwear Distributors and Retailers of America, stated, "President Trump is, in effect, using American families as a hostage in his trade war negotiations. Tariffs are taxes and this move will noticeably raise the cost of shoes at retail and will have a chilling effect on hiring in the footwear industry."
