Tariff Reversal
A deal between the U.S. and China could see them reverse tariffs on roughly $360 billion of goods they’ve imposed on each other’s imports since July.
Trump has twice delayed imposing additional tariffs on Chinese goods, that were scheduled to begin Jan. 1 and then March 1, citing progress in the trade talks. In recent weeks, investors had been heartened by signs that Trump is looking to sign a deal with Xi, possibly at a summit at Trump’s Mar-a-Lago resort in Florida.
The U.S. is pushing for enforceable targets after Trump and his trade team have criticized China for failing to live up to past promises.
U.S. and European business groups voiced skepticism about the effectiveness of a new law on foreign investment that China’s parliament rubber-stamped last week. The legislation, which is set to take effect next year, is supposed to put foreign-run enterprises on more equal footing with locally owned business and end forced technology transfers.
The American Chamber Commerce in China, however, said in a statement that it appreciated some “last-minute” changes in the laws to address the concerns of foreign investors, without offering details.
But the legislation’s lack of details, including on how it will be executed, has raised concerns it lacks teeth. Chinese Premier Li Keqiang said on Friday that China will protect IP and he hopes “foreign governments can view in an objective light the collaboration between Chinese and their foreign partners based on contractual consent.”
Bipartisan Issue
Trump has the benefit of bipartisan support for taking a tough approach on China, even from political adversaries in Congress. Senate Minority Leader Chuck Schumer, in multiple floor speeches in the past month, has urged Trump to hold the line and strike a strong and lasting deal with Beijing rather than resolve the trade war for a quick win.
Still, Trump has maintained the threat of abandoning the China talks. After walking out of a summit with North Korean leader Kim Jong Un in Hanoi last month, Trump stressed that he would be willing to do the same in a meeting with Xi if he didn’t like the terms of their deal.