Trump is stepping up the trade war with China, and he's convinced the US can win
- Chinese officials are in Washington, DC, for negations with the Trump administration concerning the countries' trade war.
- The two sides are not expected to come to a solid agreement over the next two days, but the talks are a concrete step toward alleviating the trade tensions.
- President Donald Trump appears to be committed to the trade war with China for the long haul, so it is unclear how much progress can be made.
- While the China fight continues, there are promising signs of easing in the trade battles with Canada, Mexico, and the European Union.
Chinese officials are in Washington, DC, on Wednesday in an attempt to start to resolve the growing trade war between China and the US.
The Chinese officials, led by Vice Commerce Minister Wang Shouwen, are set to meet with Treasury Undersecretary David Malpass over the next two days. The goal: Reach a deal that could lift the series of tariffs launched by President Donald Trump and the Chinese government.
The US is expected to press China to reform its economic practices, such as the alleged theft of US intellectual property, while also reducing the trade imbalance between the two countries. China, on the other hand, will attempt to get Trump to back off tariffs without having to change much about the way it conducts economic policy.
The immediate purpose of the talks appears to be paving the way for more talks, possibly between Trump and Chinese President Xi Jinping, without an agreement this week.
Expectations for the meetings are low, since they are taking place between lower-level officials and because the two sides remain far apart on the issues at hand.
"We do not expect this round of discussion to materially lower tensions between the two countries or sway President Trump from increased aggression towards China," Lewis Alexander, chief US economists, wrote in a note to clients.
The talks are the first since June and represent the first concrete step toward ending the trade war since both countries have enacted the tariffs.
Not out of the woods yet
At the same time, however, the Trump administration is making moves that could kick the trade war into high gear.
The US is set to impose a 25% tariff on another $16 billion with of Chinese goods on Friday, bringing the total amount of tariffs subject to tariffs up to $53 billion (including steel and aluminum tariffs).
More tariffs are also on the horizon. The US Trade Representative is moving forward with another set of tariffs on $200 billion worth of Chinese goods. Hearings regarding the items on the list that could be subject to tariffs are ongoing.
If those tariffs are imposed, more than 50% of all goods coming into the US from China would be subject to tariffs.
So as one part of the Trump administration tries to end the trade war with China, another part will increase the pressure.
There is no sign that Trump is ready to back off the trade war yet. Jonathan Swan and Mike Allen of the news website Axios reported Tuesday that Trump has made it clear to administration officials and members of Congress that the trade war with China is a long-term project - and that he has no plans of backing down.
"The president is all-in, 100% on China," an administration official told Axios.
In an interview with Reuters on Monday, Trump said there is "no timeframe" for ending the trade war.
Keeping the focus on China
While the talks and trade war with China move forward, the Trump administration is dialing back the trade fights on other fronts.
The handshake agreement between Trump and European Commission President Jean Claude Juncker appears to have put a pause on Trump's proposed tariffs on imported cars and auto parts.
And according to reports, the US and Mexico reached a preliminary breakthrough in negotiations regarding the North American Free Trade Agreement, or Nafta, which could ease tensions with the US's southern neighbor.
But, both of the détentes do not guarantee those fronts in the trade war are neutralized. Trump once again brought up the possibility of the auto tariffs during a rally in West Virginia on Tuesday.
"We are going to put a tax of 25% on every car that comes in from the European Union," Trump said.
The progress on the Nafta front may also fall apart since Canada, the third Nafta member, has not been involved in recent talks.
Additionally, Trump's steel and aluminum tariffs remain in place, along with retaliatory tariffs against the US. And the World Trade Organization complaints against the US remain ongoing.
It means the trade fights are far from over.