WASHINGTON (AP) — President Trump heralded a breakthrough in U.S.-China trade talks, and markets rallied in relief. But closer inspection suggests there isn't much substance, yet, to the temporary truce Trump announced at the White House after the 13th round of trade talks.
Trump on Friday agreed to suspend a tariff hike scheduled for Tuesday on $250 billion worth of Chinese imports, and said China agreed to buy $40 billion to $50 billion in U.S. farm products.
But nothing's on paper and details are scarce. China's state-run media hasn't even mentioned the promise to buy all those soybeans and other agricultural products. And the negotiators have delayed dealing with the toughest issues.
The United States is still scheduled to target another $160 billion in Chinese goods on Dec. 15, which would extend Trump's tariffs to virtually everything China ships to the United States.
Friday's announcement was "a nothing-burger," said Scott Kennedy, who analyzes China's economy at the Center for Strategic and International Studies. "I call it the 'Invisible Deal.' ... The only thing that happened Friday was that the U.S. delayed the tariff increase."
The Trump administration acknowledges that work remains to be done on what it calls "phase one" of talks with China.
"We made substantial progress last week in the negotiations," Treasury Secretary Steven Mnuchin said Monday. "We have a fundamental agreement. It is subject to documentation, and there's a lot of work to be done on that front."
Mnuchin said he expected that he and U.S. Trade Representative Robert Lighthizer will meet with China's lead negotiator, Vice Premier Liu He, before a November Asia-Pacific summit in Chile. At that gathering, Trump and Chinese President Xi Jinping could sign off on a phase one agreement.
"It's curious that Washington and Beijing have not yet put this 'deal' in writing," said Wendy Cutler, a former U.S. trade negotiator now at the Asia Society Policy Institute. "That suggests that the details may not be worked out yet. If that's the case, we should expect more bumps in the road in the lead-up to a mid-November meeting between Trump and Xi."
Trump emphasized the agricultural purchases he says China has agreed to. If China ultimately buys $40 billion to $50 billion a year, as Mnuchin said, it would mark a significant win for U.S. farmers, who have been hit hard by Trump's trade wars.
U.S. farm sales to China have never exceeded $26 billion a year, according to the U.S. Department of Agriculture.
China already is a major food importer as rising incomes boost its appetite for meat, vegetables and high-quality grains. The communist government has tried to promote self-sufficiency in rice, wheat, dairy and some other commodities, but with a population of 1.4 billion, it cannot meet all its own needs.
Jeff Moon, a former U.S. diplomat and trade official specializing in China who is president of the China Moon Strategies consultancy, said that Trump had reason to delay Tuesday's planned tariff increase. Trade hostilities are weighing on the U.S. and world economies. Tariffs have pushed up costs for U.S. manufacturers and created uncertainty about when and how the trade wars will end.
"The bottom line is that both sides (on Friday) gave themselves permission to do what they wanted to do," Moon said. "China really needs the food, and Trump doesn't want to impose the (increased) tariffs. That's the bottom line."
"It's in the two countries' interests to dial down the hostilities," agreed David Dollar, senior fellow at the Brookings Institution and a former official at the World Bank and U.S. Treasury.
The two countries are deadlocked primarily over U.S. allegations that China deploys predatory tactics — including outright theft of technologies, patents and trade secrets — in a sharp-elbowed drive to become the global leader in robotics, self-driving cars and other technologies.
Beijing has been reluctant to make the kind of substantive policy reforms that would satisfy the Trump administration. Doing so would require scaling back China's aspirations for technological supremacy, which it sees as crucial to its prosperity. "I don't think China is willing to fundamentally change its system," Dollar said.
Resolving those issues is being pushed to future talks.
Over the past 15 months, the two countries have imposed tariffs on hundreds of billions of dollars worth of each other's goods. Beijing has targeted farm products in a shot at Trump supporters in rural America.
It's taken a toll.
Tim Garrett, 63, shares a 5,000-acre farm with his brother in eastern North Dakota, where they grow mostly soybeans and corn. He voted for Trump and said he supports a better trade deal with China. But he's "not sure it's coming about."
"I'm not a huge political guy to start with, but China has been ripping us off for years," Garrett said. "I believe something had to be done. I don't think it should all be on the backs of agriculture."
Bob Metz, a fifth-generation farmer from Peever, South Dakota, and a past president of the American Soybean Association, said he hopes for a deal but until that time "the American farmer is getting hurt."
"We've heard this before," Metz said. "I don't think anything has really changed with China, has it?"
The few times China has agreed to buy soybeans, they are getting them at up to $2 a bushel cheaper than when the trade war started, Metz said.
"So who's the winner here?" he asked. "It seems that China buys a few beans going into the talks, but is the goal to get rid of them or is the goal to sell them at a good price? The Chinese have done very well on this."
Sen. Chuck Grassley, R-Iowa, a farm state hard hit by loss of soybean and pork sales to China, said he welcomes news that progress may have been made in some areas of the trade dispute, but he said a final deal must address the full scope of structural issues and include strong enforcement mechanisms.
"After so much has been sacrificed, Americans will settle for nothing less than a full, enforceable and fair deal with China," Grassley said.
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