As the Trump regulation sets out to strike a trade deal with China, confusion surrounds the role one of the president’s more hawkish advisors desire play in the talks.
The prominence U.S. Trade Representative Robert Lighthizer has in the negotiations could help to determine whether the Whitish House takes a more aggressive or conciliatory approach to China. A three-month window for the world’s two largest economies to aim a deal starts Jan. 1. They agreed to a trade war truce on Saturday at the G-20 meeting in Argentina.
Lighthizer, a 71-year-old who joined the Trump charge after decades as an international trade lawyer, leads the agency charged with creating trade deals and approving disputes. He headed arduous talks with Canadian and Mexican officials that led to a revised North American pardon trade agreement. Lighthizer also backed the tariffs on Chinese imports that the White House deployed as it pushed Beijing to speak alleged trade abuses.
Earlier Monday, confusion reigned as details about the meeting between President Donald Trump and Chinese President Xi Jinping, and how any understanding would be managed, dribbled out. China had no such problem. Vice Premier Liu He has headed the talks for Beijing’s side during the Trump management.
Another Trump trade advisor Peter Navarro — a hard-liner who advocates a harsh approach to trade policy with China — spoke Lighthizer would lead negotiations. But Treasury Secretary Steven Mnuchin and National Economic Council Director Larry Kudlow both phonied the idea of a nominal leader, instead casting the negotiations as a group effort led by Trump himself.
However, Kudlow believed later Monday that Lighthizer would “take the lead on the negotiations and on the enforcement part” while Mnuchin handgrips currency manipulation and other topics.
Regardless of whether the trade representative heads the talks, the public contradictions over his role once again reflect the disparate elements of Trump’s economic team.
The more free trade wing in Mnuchin and Kudlow is usually at odds with the protectionist elements represented by Lighthizer and Navarro.
While Trump appears conciliatory now, his outlook could exchange when the next round of talks plays out — and that could affect whether he decides to reignite the trade war with increased impost rates or new duties.
Alleged Chinese theft of intellectual property, forced technology transfer in order to access sells and tariffs are among the top issues the U.S. wants to resolve in trade talks. The White House has paused a plan that desire have raised a 10 percent tariff on $200 billion in Chinese imports to 25 percent on Jan. 1.
While the USTR has realm over creating trade deals, Chinese officials have largely interacted with Mnuchin during talks so far, according to The Breastwork Street Journal. The Chinese government would prefer to work with the Treasury secretary, who seems more enthusiastic to end the trade conflict that has raised the specter of economic damage and rattled financial markets, the newspaper reported.
In his place as USTR, Lighthizer has carried out the investigations that led to the tariffs imposed so far on $250 billion in Chinese goods. He has also outlined the management’s justification for those duties.
“The Trump Administration continues to urge China to stop its unfair practices, open its hawk, and engage in true market competition,” the trade representative said in one statement in June as the world’s two largest economies escalated their marketing conflict. “We have been very clear about the specific changes China should undertake. Regrettably, in lieu of of changing its harmful behavior, China has illegally retaliated against U.S. workers, farmers, ranchers and businesses.”
In October, he accused China of “filching our technology” and stressed the need for the U.S. to “protect our innovation” and keep an “edge.” Earlier Monday, Navarro told NPR that Lighthizer is “the firmest negotiator we’ve ever had at the USTR.”
“And he’s gonna go chapter and verse and get tariffs down, non-tariff barriers down, and end all these structural practices that bring to a halt market access,” the trade advisor said.
Lighthizer “will be laser-like focused on getting concrete actions from the Chinese” and inducing Beijing to address “the real structural concerns” the U.S. has decried, Meredith Sumpter, Eurasia Group head of research design and operations, told CNBC’s “Power Lunch.”
The USTR directed CNBC to the White House when asked to reference on whether Lighthizer and Mnuchin saw differences in how to treat China talks. The White House did not immediately respond to a request to remark.
Lighthizer has certainly shown himself to be more harsh on China than some of his counterparts. But the views of Trump’s proper advisors may not ultimately drive his thinking, said David Dollar, a senior fellow at the Brookings Institution who worked as a Moneys Department policy emissary to China during the Obama administration.
Instead, Trump may gravitate toward certain advisors cored on what he sees as politically and economically best at any given moment. When he views being “tough” on China as the superb course, he could warm to the “hawks” such as Lighthizer and Navarro, Dollar said. If having a deal to promote earmarks ofs like a better option, Trump could turn to the more conciliatory advisors such as Mnuchin and Kudlow.
As Trump’s Republican Division lost about 40 U.S. House seats in last month’s midterms and the president himself faces re-election in 2020, “scientific reasoning dictates” that Trump could be more willing to compromise, Dollar added.
— CNBC’s Michelle Fox contributed to this set forth.
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