Donald Trump got a belated lifeline from China for his claims of having worked a deal, even if it’s still not quite clear the terms to which Xi Jinping agreed. Late yesterday, after markets tanked over the confusion, Beijing offered an official confirmation of the 90-day suspension of reflexive tariff actions, as well as outlining new policies for punishing intellectual-property theft, the flashpoint for US anger over trade issues:
Beijing will start to quickly implement specific items where there’s consensus with the U.S. and will push forward on trade negotiations within the 90-day “timetable and road map,” the Ministry of Commerce said in a statement on Wednesday morning in China.
Hours later, Bloomberg News reported that officials have begun preparing to restart imports of U.S. soybeans and liquefied natural gas — the first sign confirming the claims of Trump and the White House that China had agreed to start buying some U.S. products “immediately.” Trump retweeted an edited excerpt of that article Wednesday.
In China, a Ministry of Foreign Affairs spokesman said that country hopes to speed up talks and is devoted to finding a solution to settle issues.
That news didn’t make it in time to send the markets into an 800-point selloff yesterday, nor to stop media reports of confusion in the White House. The Washington Post reported late yesterday that no one there was sure exactly what was going on. Financial giant JPMorgan accused Trump of either fabricating or grossly exaggerating the interim agreement with Xi:
While Trump tweeted a day after the meeting that China would “reduce and remove” tariffs on U.S. automobiles, his aides acknowledged privately Tuesday that China had made no such commitment.
“Nobody knows what the deal is,” said one top White House adviser, who was among six administration officials interviewed for this story who spoke on the condition of anonymity to describe internal deliberations.
“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,” JPMorgan wrote in a trading note.
“Not to sound naive or anything,” Trump said while declaring trust in Xi’s word:
We’ll see how that works out. It may have taken a while, but at least China confirmed two points: there is a 90-day pause on further tariff actions to allow for more negotiations, and China will take some public steps to address IP theft and other extortive industrial practices. The latter is still more of a pledge than an action, as the Bloomberg analysts note. Just how enthusiastically China will enforce these 36 new punitive actions is anyone’s guess, but presumably their initial enthusiasm will be high enough to get whatever concessions they need from Trump in this negotiation.
For now, though, China is preparing to make agricultural and energy purchases again, a good sign for future prospects — although it may be a bit late for American farmers:
Chinese officials have begun preparing to restart imports of U.S. soybeans and liquefied natural gas, the first sign confirming the claims of President Donald Trump and the White House that China had agreed to start buying some U.S. products “immediately.”
Chinese officials have been told to take necessary steps for the purchases, according to two officials with knowledge of the discussions. …
Chinese imports of American soybeans fell 95 percent in October compared to last year, damaging the prospects of Midwest farmers who are in the middle of harvest. Even if the tariffs are lifted now, the U.S. crop is becoming less competitive in the Chinese market as the harvest season approaches in South America. America has probably already missed its best chance to sell soybeans to China, according to Cargill Inc., one of the world’s biggest agriculture commodity traders.
If Trump can make a deal in which Xi opens China’s markets and reins in IP theft, the pain will have been worth it. Congress might have to offer a short-term support for farmers taking losses, but if a deal gets announced within the 90 days, the cost for that should be relatively low. We may not know precisely what the interim deal was, but at least we know there is one.