8 Jan 2019
Recent Developments in U.S. Trade Discussions with Mainland China
Bi-lateral trade talks between the United States and mainland China began on 7 January in Beijing. The U.S. delegation is chaired by Deputy U.S. Trade Representative Jeffrey Gerrish and includes high-level officials from the departments of Commerce, Agriculture, Energy, State and Treasury. Gerrish is considered a trusted deputy of USTR Robert Lighthizer, having worked with him at a prominent Washington law firm prior to both being appointed to USTR in the Trump administration. Mainland China's Commerce Ministry said in a statement that U.S. trade negotiators will “optimistically and constructively communicate with (the) Chinese delegation on the important agreements achieved by the two leaders during the meeting in Argentina.”
White House Council of Economic Advisors Chairman Kevin Hassett said in a televised interview with CNN on 3 January that U.S. companies doing business in mainland China should expect lower earnings until policy issues are resolved. Speaking a day after Apple told investors that revenue in its recently completed quarter will be lower than projected due in large part to lower sales in mainland China, Hassett said that “it’s not just Apple; I think there are a heck of a lot of U.S. companies that have sales in China that are basically going to be watching their earnings be downgraded next year until we have a deal.” On the same day, U.S. agricultural firm Cargill announced worse-than-expected results out of mainland China.
As these talks take place, the United States continues to insist that an agreement encompassing significant progress must be made by 2 March or US$200 billion in mainland Chinese exports currently subject to a 10 percent additional tariff will face a tariff of 25 percent.