Foreign Trade

The Architect of Trump’s Threatened China Trade War

4/7/18
from The Wall Street Journal,
4/6/18:

U.S. Trade Rep Bob Lighthizer argued that years of negotiation with Beijing had produced little and now the time had come for a confrontational approach.

President Donald Trump’s tough policy on China trade took shape in a White House meeting last August—and at the center was an often-overlooked man. Decades of quiet negotiations had gotten nowhere, U.S. Trade Representative Robert Lighthizer told senior White House advisers and cabinet officials gathered in the Roosevelt Room. “China is tap, tap, tapping us along,” he said, meaning it regularly promised policy changes but didn’t deliver. He punctuated his talk with charts showing how the trade deficit with Beijing had widened. U.S. Ambassador to China Terry Branstad, linked by videophone, asked for a chance to conduct another round of talks based on a rapport he was developing with the Chinese. He found little support. It was time to act, starting with a formal investigation of China for unfair trade practices, Mr. Lighthizer argued.

Mr. Lighthizer’s role became clear to the Chinese when the Trump economic team landed in Beijing in November for a round of discussions. Mr. Trump made sure the U.S. trade representative met with top Chinese leaders while some others waited outside. In a session with President Xi Jinping, Mr. Lighthizer laid out how fruitless the U.S. considered past negotiations and how the president was concerned the U.S. trade deficit continued to expand. While US officials saw Mr. Lighthizer’s comments as a lawyerly argument, Chinese officials described their reaction as shocked.

Today, Mr. Lighthizer is exchanging letters with China’s senior economic envoy on measures Beijing could take to head off a trade war. Negotiations are likely to stretch over many months—an ambiguity that could rattle financial markets and lift prices on goods earmarked for tariffs. “Trump and Lighthizer are like-minded,” said William Reinsch, a former trade official now at the Center for Strategic and International Studies. “There is a negotiating strategy of bullying, intimidation, and threats to soften up [the adversary]. Then, maybe make a deal.”

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