China wants a 'balanced' trade deal at summit, but the US isn't interested
- China is hoping that this week's G-20 negotiations will result in a balanced trade deal, but the U.S. says that won't happen, according to CNBC's Kayla Tausche.
- The reason the U.S. is resisting a balanced deal is because of past transgressions by China.
With less than two days before a high-stakes meeting between President Donald Trump and Chinese President Xi Jinping, one of the key issues that will be discussed is getting a balanced deal.
China believes any new agreement will need to be evenhanded, while U.S. Trade Representative Robert Lighthizer told his Chinese counterparts that balance won't happen, according to a person familiar with the matter.
The reason why the U.S. will not prioritize balance is because of China's past trade transgressions. Among other things, China has been accused of stealing U.S. technology.
In a phone call Monday, Lighthizer dismissed China's notion that any trade deal be "balanced," citing the various violations of intellectual property that led to the current state of play, according to two people with knowledge of the call.
Lighthizer told Chinese Vice Premier Liu He no trade could be "balanced," as Beijing was requesting, because of the country's many prior intellectual property violations that led to the current state of play.
China's vice premier was reiterating the country's position outlined in several state media outlets in May: "the text must be balanced and expressed in terms that are acceptable to the Chinese people and do not undermine the sovereignty and dignity of the country."
President Donald Trump has targeted China for tariffs as he seeks level ground and to reduce the deficit the U.S. has consistently run in trade between the two sides. The deficit in 2018 stood at $419.5 billion and was already at $106.9 billion through the first four months of 2019, according to Census Bureau data.
Trump said Wednesday he would like to see a deal but is content with where things are now. "They want a deal more than I do," he told Fox Business Network.
The U.S., according to White House economic adviser Larry Kudlow, plans to keep pushing for structural reforms – and if China can't agree to them, move forward with a new set of tariffs.
The U.S. has levied 25% tariffs on $250 billion worth of Chinese goods and has threatened to put additional duties on the remaining $300 billion of imports.
Chinese officials have hopes that they can get some of their issues resolved since Trump has tightened the clamps on the trade issue.
Among their priorities will be a lifting of the ban on the sale of U.S. technology to Huawei Technologies, getting all current tariffs dropped, and accepting a lower purchase amount of U.S. goods, according to two people with knowledge of the matter. These sources said these items are on China's checklist for an eventual deal, not this week's talks – meaning the two leaders could still reach a truce of undetermined length if they feel a compromise could eventually be within reach.
While Trump has signaled a willingness to budge on Huawei, the other two issues are far from becoming a reality. The U.S. team had discussed a potential schedule for removing tariffs when China had proven it could comply with a deal. And Trump had previously told advisers he wanted "double or triple" China's $1.2 trillion purchase offer — not less.
Trump is being joined in Osaka by multiple members of his trade team, including Trade Representative Robert Lighthizer and economic advisor Peter Navarro, who has pushed for an aggressive posture with China, Tausche reported, adding that the key deputies have reached out to their Chinese counterparts.