After Failed Talks, Trade Negotiations Resume With China

Jan 30, 2019
Originally published on January 30, 2019 8:14 am
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RACHEL MARTIN, HOST:

U.S. and Chinese negotiators are in Washington, D.C., today for the start of high-level trade talks to try and bring an end to the trade war between the world's two biggest economies. NPR national political correspondent Mara Liasson joins us now. Good morning, Mara.

MARA LIASSON, BYLINE: Hi, Rachel.

MARTIN: What is supposed to happen in this meeting? - incremental or are there big expectations?

LIASSON: What's supposed to happen is the U.S. is going to press China on two fronts. The first is getting the Chinese to lower the trade deficit between the two countries, buy more American stuff - commodities like soybeans. The second goal is much harder. It's to address these structural issues. The U.S. wants China to stop intellectual property theft, stop what they call forced technology transfer. That means forcing American companies to hand over their technology secrets. They don't want China to require U.S. companies to have a Chinese partner when they operate in China. In other words, the U.S. wants China to change its business model. So the big question about these talks is, will Donald Trump be so eager for a deal that he'll settle for China buying some more soybeans and not push harder on the structural issues? What I'm being told is even though the president started out being pretty obsessed with the trade deficit...

MARTIN: Yeah.

LIASSON: ...Which economists will tell you is really not the most important metric, he is now very focused on these structural issues. And tomorrow, when he sits down with the Chinese vice premier, he will have a chance to press these issues.

MARTIN: So why the change? I mean, I guess the question is...

LIASSON: Because that's what's - oh.

MARTIN: What has the pain been like? And is that...

LIASSON: Well...

MARTIN: ...Tipping the scales here?

LIASSON: I think the change is just that the president has come to understand that these structural issues are the real problem and the trade deficit - just getting China to buy more soybeans from the U.S. wouldn't really solve the problem. But in terms of the pain, there is a trade war - maybe a low-level trade war - right now between the U.S. and China. The president has put 25 percent tariffs on $50 billion of Chinese imports, another 10 percent tariffs on $200 billion worth. And then on March 1, he is threatening to raise that to 25 percent if they don't get a deal. And that could really affect the world economy. These are the world's two largest economies.

MARTIN: And, of course, all this is complicated by the fact that the Justice Department brought charges against the Chinese tech giant Huawei - big, huge, Chinese telecom. I mean, how's that going to play into these negotiations?

LIASSON: That's a very good question. The treasury secretary Steve Mnuchin says the indictments against Huawei and the Chinese trade talks are on two separate tracks. But the question is, will the Huawei indictments become a bargaining chip in the trade talks? How will they - how can they not become a bargaining chip in these trade talks?

MARTIN: Right. Mnuchin may want them on separate tracks. But is...

LIASSON: Right.

MARTIN: Are the Chinese going to look at it that way?

LIASSON: No. The Chinese, clearly, will want to roll them together. But these talks are probably not going to come to a resolution this week. But the Huawei indictments, at some point, I think, will affect them.

MARTIN: NPR national political correspondent Mara Liasson for us this morning, talking about these trade talks happening in Washington between U.S. and Chinese negotiators. Mara, thanks. We appreciate it.

LIASSON: Thank you. Transcript provided by NPR, Copyright NPR.