Monday, May 21, 2018

Getting fat on Trump's lunch


That is what the Chinese negotiators feasted on during the most recent round of Sino-American trade negotiations. And surprising to no one outside of the White House the US ended up with nothing after making a huge concession.
Chinese negotiators left Washington this weekend with a significant win: a willingness by the Trump administration to hold off for now on imposing tariffs on up to $150 billion in Chinese imports. China gave up little in return, spurning the administration’s nudges for a concrete commitment to buy more goods from the United States, and avoiding limits on its efforts to build new high-tech Chinese industries.

The trade fight is far from over. And large Chinese technology companies in particular could be vulnerable if the United States starts punching again, with administration officials appearing to back away from Mr. Trump’s pledges to help ZTE, a Chinese telecommunications company hit with severe American penalties.

Still, the latest round of negotiations showed that a confident China could be more than a match for divided American officials who have made often discordant demands. Mr. Trump, who proclaimed earlier this year that “trade wars are good, and easy to win,” and his advisers may find that extracting concessions from China is much harder than they expected it would be.

On Monday, Mr. Trump defended the approach, promoting the talks as a success. On Twitter, he said that barriers would “come down for the first time,” and China will “purchase from our Great American Farmers practically as much as our Farmers can produce.”

But American negotiators were dealing with a China eager to show its strengths. During last week’s talks, China for the first time sent a strategic bomber to an island reef in the South China Sea, an area where Beijing has laid claims of sovereignty — claims the United States has challenged.

China’s success partly comes from its ability to stick to a single strategy in trade. Even as Beijing has shown a willingness to talk and make peace offerings in the form of multibillion dollar import contracts, it has held fast to its refusal to make any commitment for a fixed reduction in its trade gap with the United States. The trade imbalance between the countries has actually widened since Mr. Trump visited Beijing in November and oversaw the signing of import deals on everything from beef to helicopters.

Beijing also has not bent on its Made in China 2025 initiative, an industrial modernization program that Washington and American business groups complain forces foreign companies to share their best technology while potentially creating state-sponsored rivals.

China said on Monday that it welcomed more talks.

“The two sides have come to recognize that only through consultation can we properly handle trade disputes,” Lu Kang, the spokesman for China’s foreign ministry, said during his daily news briefing on Monday.
Having succeeded so well, China naturally welcomes more talks. And knowing what they want and staying with that goal using skilled professional negotiators makes their triumph over the World's Greatest Deal Maker so much easier.

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