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Lighthizer bound for China next week to talk tradeLighthizer bound for China next week to talk trade

Meeting is expected to involve a broad discussion of outstanding issues and isn't expected to yield major breakthroughs


July 23, 2019

3 Min Read
U.S. Trade Representative Robert Lighthizer testifies during a House Ways and Means Committee hearing on February 27, 2019 in
U.S. Trade Representative Robert Lighthizer testifies during a House Ways and Means Committee hearing.Mark Wilson/Staff/GettyImagesNews

By Shawn Donnan and Jenny Leonard

U.S. Trade Representative Robert Lighthizer and senior U.S. officials are set to travel to China next Monday for the first high-level, face-to-face trade negotiations between the world’s two biggest economies since talks broke down in May.

Lighthizer and a small team will be in Shanghai through Wednesday, according to people familiar with the plans who asked not to be identified. The meeting will involve a broad discussion of the issues outstanding and isn’t expected to yield major breakthroughs, a senior administration official said.

President Donald Trump and Chinese counterpart Xi Jinping met at the Group of 20 summit in Japan last month and declared a tentative truce in their year-long trade war. The leaders directed their negotiators to resume trade talks. Since then Treasury Secretary Steven Mnuchin, Lighthizer and their Chinese counterparts have spoken by phone.

According to a senior administration official, the Chinese requested that the meeting take place in Shanghai, rather than Beijing.

Stocks jumped to their high for the day, with the S&P 500 up 0.6% as of 2:45 p.m. in New York.

Structural Issues

U.S. officials have played down the likelihood of a quick deal with China.

“It is impossible to judge how long it will take when the president’s objective is to get a proper deal or go ahead with tariffs,” Secretary of Commerce Wilbur Ross told Bloomberg TV on Tuesday. “What is important is if we make a deal, it’s a proper deal, a really good deal. That’s his overriding objective. And that’s much more important than exact timing.”

The sides remain at odds over significant issues like Washington’s demands for structural reforms to China’s economy and Beijing’s call for the U.S. to remove existing punitive tariffs on imported Chinese goods.

The talks in recent weeks have focused on Huawei licenses and agriculture purchases, and lacked engagement on structural issues that the U.S. wants addressed in any trade deal.

People familiar with next week’s meeting say it’s a positive step for talks overall but caution that it’s likely to feature a wide-ranging discussion of where things stand, rather than a chance for substantive negotiations. It’s still unclear what the starting point will be for deeper discussions. Talks collapsed in May because the two countries disagreed on draft terms of a deal.

Trade Negotiators

The meeting will be the first time that China’s Commerce Minister Zhong Shan joins the core group of negotiators, which on the Chinese side has been led by Vice Premier Liu He.

Zhong is seen as more of a hardliner than Liu and some China watchers say he was added to the talks to ensure that a more hawkish view is represented at the table. Zhong is a known quantity for many U.S. officials, including Lighthizer who has met him several times over the past two years at international meetings such as Asia-Pacific Economic Cooperation summits.

On Monday, Trump and senior White House officials, including Mnuchin and Lighthizer, met with chief executives of U.S. technology companies in a step toward easing a ban on sales to China’s Huawei Technologies Co., which has been another point of tension in the relationship.

National Economic Council Director Larry Kudlow told reporters Tuesday that the meeting was positive and cited it as one reason he’s optimistic that in-person talks with China were likely to resume soon.

--With assistance from David Westin and Ryan Haar.

To contact the reporters on this story:

Shawn Donnan in Washington at [email protected];

Jenny Leonard in Washington at [email protected]

To contact the editors responsible for this story:

Margaret Collins at [email protected]

Alister Bull

© 2019 Bloomberg L.P.

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