Panelists Uncertain About China Trade Deal, Say Agreement Broke Down Over Enforcement
U.S.-China trade talks broke down over disagreements about the deal’s enforcement mechanism, said Michael Pillsbury, the director for Chinese strategy at the Hudson Institute. And as negotiations are expected to restart, Pillsbury said there is no guarantee a deal will be struck.
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Speaking during a July 25 panel hosted by the Atlantic Council, panelists Pillsbury and CNN chief national security correspondent Jim Sciutto both expressed uncertainty about whether a deal would get done. Sciutto referenced comments made by Jack Ma, founder of the Chinese e-commerce company Alibaba, who said the trade war could go on for years. “Some make the point that this trade war is not going to last a couple years, it's going to last decades,” Sciutto said. “We have reoriented the relationship.”
Pillsbury said the most recent sticking point between the U.S. and China centered on enforcement of the potential deal, where “either side could accuse the other of breaking the deal and then there would be tariffs or other kinds of punishment.” Pillsbury also said he believes President Donald Trump's message that he doesn’t know if a deal will be reached. But Pillsbury also said a deal will likely be struck to avoid prolonging the conflict. “Are people walking out in a huff and saying, ‘you monster, I’m not talking with you?’ No. Both sides seem to know we have to make a deal,” he said. “The two sides are shadow-boxing. They seem to know ultimately what a deal would look like.”
Sciutto said there is internal division within the Trump administration regarding how many concessions should be given to the Chinese. But Sciutto said the U.S. and China are incentivized to reach an agreement because a decoupling would significantly hurt both sides. “We would both suffer in many ways if we allow these planets to just decouple entirely, he said. “I worry about that.” Other China experts have argued in favor of decoupling (see 1907180033).
Although he did not list names, Pillsbury criticized experts who he said “think they know what [Trump’s] China policy is,” saying they’re inadvertently hurting the U.S.’s chances of reaching a trade deal. Pillsbury said many China experts based in the U.S. say the Trump administration views China as an adversary. “It characterizes President Trump’s policy toward China as seeing China as an enemy,” he said. “I think that’s not correct … not once has any Trump administration official used the word ‘enemy.’” Chinese officials listen to these experts to gain insight into Trump's thinking, which have led to harsher Chinese measures and stricter negotiations during the trade war, Pillsbury said.
Pillsbury said the administration does not know whether a deal will be struck. “The possibility of a descent into war does exist,” he said. “Let’s be tough. Let’s walk out of trade talks if we have to. As the president has said, maybe there will be no deal.”