The Stakes Are High As China And The U.S. Resume Trade Talks

NPR's Ari Shapiro talks with Wendy Cutler, vice president of the Asia Society Policy Institute and a former U.S. trade negotiator, about the U.S.-China trade talks, which resumed Monday in Beijing.

ARI SHAPIRO, HOST:

The U.S. and China resumed trade talks in Beijing today. Negotiators picked up where President Trump and Chinese President Xi Jinping left off on December 1. The leaders agreed to a 90-day truce in the trade war, a temporary hold on any additional tariffs. If there's no deal, Trump says he'll increase tariffs on a bunch of Chinese goods March 1. Over the weekend, he sounded optimistic.

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PRES DONALD TRUMP: The China talks are going very well. I spoke to President Xi recently. I really believe they want to make a deal. The tariffs have absolutely hurt China very badly.

SHAPIRO: Wendy Cutler is a former U.S. trade negotiator and now vice president of the Asia Society Policy Institute. Welcome.

WENDY CUTLER: Thank you.

SHAPIRO: What's the goal of the U.S. delegation in Beijing this week?

CUTLER: I think their primary goal will be to assess the seriousness of the Chinese delegation in addressing the range of U.S. concerns with respect to China's market. Now, those include the lack of market access, high tariffs, high bilateral trade deficit, forced technology transfer, lax intellectual property protection enforcement and other issues as well.

China has rolled out in the past few weeks a number of measures and have made a number of announcements about increasing purchases of U.S. soybeans, temporarily reducing the U.S. auto tariff and stepping up IPR enforcement.

SHAPIRO: That's intellectual property rights.

CUTLER: Correct. And at this meeting, I think the United States will be very interested on hearing more details and more specificity and the time frames for these announcements that China has made. And I think they'll also be looking for additional concessions by China as well.

SHAPIRO: So we just heard President Trump say he thinks China has a vested interest in cutting a deal because U.S. tariffs are hurting them. Do you see evidence of that? Do you think that's true?

CUTLER: Absolutely. I think the tariffs are having an effect on the Chinese economy, but I also think they're affecting the U.S. economy. So I think both sides are coming to the table, trying to strike a deal, wanting a deal, but I don't think a deal at any cost. And so we'll have to see if they can find common ground if both sides have the flexibility to move off their positions and to find a negotiated solution.

SHAPIRO: And how absolute do you think that March deadline is? If the two sides are close to a deal, do you think it could move?

CUTLER: Oh, I think that if substantive progress is made and some breakthroughs are made on certain issues, that we may see a rollover of the talks and the continuation of the tariff truce while both sides continue to negotiate. That's normal.

SHAPIRO: You know, President Trump can be so impulsive. He often undermines aides and contradicts advisers. Do you think the parties can negotiate in good faith here, or is there a risk that Trump might blow up whatever they might agree to?

CUTLER: As we've seen, there's always a risk, as you mentioned. That said, I think the fact that Ambassador Lighthizer is leading these talks is very important. I think the president has a lot of confidence in Ambassador Lighthizer, particularly...

SHAPIRO: This is Ambassador Robert Lighthizer, the U.S. trade representative.

CUTLER: Correct, particularly given Lighthizer's success in negotiating the U.S.-Mexico-Canada agreement. And so I think that Lighthizer goes into these talks with a lot of credibility and the backing of the president.

SHAPIRO: And what are the stakes here if the two sides can't reach a deal?

CUTLER: The stakes are extremely high. I think if the tariffs go up to 25 percent on $200 billion worth of Chinese imports into the United States, the U.S. is going to be feeling this very quickly across our economy. And I think there'll be quick reverberations in our markets. And I think that the Chinese markets in other corners of their economy will respond as well. And I think overall global economic growth will sink. And so the stakes are very high.

SHAPIRO: That's Wendy Cutler, former acting deputy U.S. trade representative during the Obama administration, now with the Asia Society Policy Institute. Thanks a lot.

CUTLER: Thank you.

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