Analysts Doubt This Week's Trade Talks With China Will Be Successful
STEVE INSKEEP, HOST:
What will it take for the United States and China to reach a trade deal? Top negotiators from both countries are meeting today in Washington for another round of trade talks, hoping to narrow their differences. But the latest negotiations come just as the U.S. prepares to raise tariffs on some $250 billion worth of Chinese imports. That's coming right up in a few days.
NPR chief economic correspondent Scott Horsley has been covering this story. He's on the line. Scott, good morning.
SCOTT HORSLEY, BYLINE: Good morning, Steve.
INSKEEP: Gosh, we were talking with Peter Navarro, the president's trade adviser, the other day, and he said any deal has to be comprehensive, cover a lot of things. They only want a big deal. What does that mean?
HORSLEY: Yeah. The president himself has been saying he wants a big deal. That means halting China's forced transfer of American technological know-how, stopping China from subsidizing its government-controlled businesses, forcing China to open up its markets to U.S. exports. All that's a pretty tall order. Matthew Goodman, an Asia expert who served in both the George W. Bush and Obama White Houses, told me it may be too tall to actually deliver this week.
MATTHEW GOODMAN: I think a big deal is very unlikely. The differences between the two sides are too great, and the sort of underlying competitive forces are too strong right now to really suggest the possibility of a big deal.
HORSLEY: Goodman says a more likely hope right now is a more modest deal that would maybe suspend the Trump tariffs and get China to buy some more U.S. farm goods.
INSKEEP: OK, a more modest deal, but we have the president himself and his trade advisers saying they only want a big deal. They're not really interested in a modest deal. Is a modest deal very likely?
HORSLEY: You know, you also have the administration this week adding more than two dozen Chinese entities to an export blacklist. That's not exactly rolling out the welcome mat for the trade negotiators. That was over the Chinese treatment of Muslim Uighurs in the northwestern part of the country.
HORSLEY: The administration's also denied visas to Chinese officials who are associated with the mistreatment of Uighurs. You know, some observers are cheering the White House for taking a stand on human rights. But others are asking, what took so long? And then there's still a third group saying, why do you do this just as the trade talks are about to get underway? So it's a complicated situation.
And then of course you've got the impeachment process as a distraction for the White House. Who knows how that affects these trade talks?
INSKEEP: OK. So a lot of complicating factors here as the negotiators meet face to face here in Washington. Let's say they don't reach a deal of any kind - a big deal, skinny deal, no deal at all. What happens?
HORSLEY: In that case, the trade war just grinds on. And it is doing damage on both sides of the Pacific. You've also got, as you mentioned, higher tariffs set to kick in next week on a quarter-trillion dollars' worth of Chinese goods that the U.S. buys. That list includes a lot of machine parts, industrial equipment. Syracuse University economist Mary Lovely says that extra tariff would just add to the pain that a lot of manufacturers in the U.S. have already been feeling.
MARY LOVELY: Ratcheting up these tariffs is really going to start to disintegrate global supply chains. For some people who want to see U.S. companies buying nothing in China, that's good news. But we have to remember that every other country in the world will be doing business with China. That puts our companies at a severe disadvantage in doing business.
HORSLEY: And keep in mind, Steve, there is still another round of tariffs in the pipeline set to kick in in mid-December. Unlike a lot of the tariffs we've already seen, the December tariffs would fall squarely on consumer goods, like laptop computers and cellphones. The White House postponed those tariffs to avoid hurting the holiday shopping season. But if we get to December 15 with no agreement, consumers could be looking at a costly new year.
INSKEEP: Scott, thanks.
HORSLEY: You're welcome, Steve.
INSKEEP: That's NPR chief economics correspondent Scott Horsley. Transcript provided by NPR, Copyright NPR.