China purchases could undercut Donald Trump's larger trade goal

International News

At the heart of President Trump’s negotiations with China is a troubling contradiction: The United States wants to use the trade talks to encourage the country to adopt a more market-oriented economy. But a key element of a prospective deal may end up reinforcing the economic power of the Chinese state.

Negotiators are still working out deal terms, but any agreement seems certain to involve China’s promise to purchase hundreds of billions of dollars of American goods. For Mr. Trump, this is an essential element that will help reduce the United States’ record trade deficit with China and bolster farmers and other constituencies hurt by his trade war.

But those purchases will be ordered by the Chinese state, and most will be carried out by state-controlled Chinese businesses, further cementing Beijing’s role in managing its economy and potentially making United States industries even more beholden to the Chinese.

“It seems like those types of really simplistic purchasing commitment type of arrangements would actually reinforce state ownership rather than discourage it,” said Rufus Yerxa, the head of the National Foreign Trade Council, which represents the United States’ largest exporters.

After months of talks, the two sides are inching closer to an agreement. Robert Lighthizer, Mr. Trump’s top trade negotiator, and Steven Mnuchin, the Treasury secretary, discussed the remaining sticking points with their Chinese counterparts on Thursday evening and Friday in Beijing. Mr. Mnuchin, in a tweet on Friday, said the talks had been “constructive.”


 Both sides are trying to iron out an agreement by this week, to coincide with a visit to Washington by Liu He, the Chinese special envoy charged with negotiating the deal...Read More