Hawkish US trade official Lighthizer tapped to lead China trade talks

Alicia Cross
December 5, 2018

President Donald Trump announced that China agreed to reduce and remove tariffs on imported cars on Sunday.

On Tuesday, the stock market plummeted in the wake of President Trump's troubling tweets about the possibility of a renewed trade war with China.

"If it is, we will get it done", Mr Trump said in a Twitter post.

Trump said: "What I'd be doing is holding back on tariffs".

Central to the deal was an agreement between President Trump and China's President Xi Jinping to not increase tariffs for 90 days to allow for talks.

Already there was confusion over when the 90-day period would start.

Trump's comments come after leaders of the world's two biggest economies agreed Saturday in Argentina to not impose any new tariffs on each other's exports for the next 90 days while they negotiate a detailed trade agreement.

But, he added, "I'm sure secretary Mnuchin will be deeply involved as well".

It also said China had agreed to start buying farm products from United States farmers immediately.

USA exports of cars and light trucks to China were worth US$9.5 billion in 2017 and have dropped off significantly since China imposed its retaliatory tariffs over the summer that gave exporters in Europe and Japan a significant advantage.

A lack of detail from the Chinese side has left investors and analysts wondering if Mr Trump's exuberance is warranted, and if details touted by the White House but left out of Chinese reporting on the agreement are in question.

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He was welcomed by Argentina's President Mauricio Macri at Costa Salguero in the capital at the start of the G20 Leaders' Summit. She promised to push for a transparent, credible investigation that would ensure "confidence in the outcome of it".

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Trade Minister Liam Fox said May's attempts to win over Britons by touring the country to sell her deal was working. Dr Fox said he refuses to criticise his neighbouring MPs across the South West who aren't backing the deal.

"It doesn't seem like anything was actually agreed to at the dinner and White House officials are contorting themselves into pretzels to reconcile Trump's tweets (which seem if not completely fabricated then grossly exaggerated) with reality", J.P. Morgan Chase said in a trading note.

The United States expects China to take immediate action to cut tariffs on U.S. vehicle imports and end intellectual property theft and forced technology transfers as the two countries move toward a broader trade deal, a White House official said on Monday.

But here's what is particularly concerning: numerous issues around which negotiations will now revolve-above all the theft-by-hacking of intellectual property-are issues where China denies being at fault, and where a meaningful resolution would involve China proving that it has changed its practices.

A White House official said it started on December 1.

"There's a specific understanding that we're going to now turn the agreement the presidents have into a real agreement over the 90 days", Mnuchin told reporters during a gaggle outside the West Wing, while the president was busy tweeting on the topic and said he has a "very strong and personal relationship" with President Xi.

Mr Trump has long accused China of unfair trade practices that hurt United States citizens and the economy.

His appointment of Mr Lighthizer to lead the talks instead of Mr Mnuchin puts one of the administration's toughest China critics in charge.

Neither the Chinese government nor official state media has made any mention of the 90-day time limit to reaching a consensus on trade, just one of several areas in which both countries' accounts of the terms agreed during the leaders' summit have varied.

He later said China had committed to buying large amounts of U.S. agricultural products and completely removing all tariffs on USA automobiles, a huge shift from its current 40 per cent penalty.

"I would use that as a litmus test, it's so easy", said Kudlow, director of the National Economic Council.

Other reports by Free-Prsite

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