President Trump is largely ignoring economic warning signs in the U. S., saying China is too weak to keep up the trade fight.
WASHINGTON — President Trump is cheerleading his way past the economic warning signs that have rattled financial markets and unnerved economists, insisting that the United States has an advantage in a crucial first round of trade negotiations beginning on Monday in Beijing.
It helps his case that the Labor Department published a jobs report for December that soared past expectations. “China’s not doing very well now,” Mr. Trump said in a news conference at the White House, hours after the report came out on Friday. “It puts us in a very strong position. We are doing very well.”
Mr. Trump is correct about China’s economy, which by several measures appears to be hobbled by American tariffs on $250 billion worth of Chinese imports. But the president’s confidence about the domestic economy largely ignores what others see as looming threats, including damage from a protracted federal government shutdown, the waning effects of Mr. Trump’s $1.5 trillion tax cut and contagion from China’s pain to American companies, farmers and consumers, Friday’s data notwithstanding.
Chinese officials appear set to offer a mix of concessions, including reducing some tariffs on American goods, as they try to defuse trade tensions ahead of a March 2 deadline, when tariffs on $200 billion worth of imports will increase to 25 percent from 10 percent. An American delegation of midlevel trade officials will begin two days of talks with their counterparts on Monday in Beijing, led by Jeffrey Gerrish, the deputy United States trade representative, and David Malpass, the Treasury Department’s under secretary for international affairs.
If the talks are constructive, a senior-level delegation of Chinese officials is expected to travel to Washington within a few weeks to meet with Robert Lighthizer, Mr. Trump’s top trade negotiator, and Steven Mnuchin, the Treasury Secretary.
Top administration officials are confident they are in a strong enough position to win significant changes, including an end to China’s practice of forcing American companies to hand over intellectual property and an agreement to buy more agricultural and energy products from the United States.
While such concessions are possible, China trade experts say they are not likely to happen easily or quickly, given the structural and legal changes they would require. That could ultimately set the stage for a protracted fight that goes beyond March 2 and hurts consumer spending, corporate profits and economic growth in America.
“The balance of leverage appeared to have shifted in favor of the U. S., with signs that China’s economy was slowing down, but the stock market rout and concerns about a U. S. growth slowdown have restored a more even balance between the two sides,” said Eswar Prasad, a trade expert at Cornell University. “Still, it will be tough sledding for the U. S. and China to reach a deal that is acceptable to both sides.”
He added: “The best that can be hoped for is a cessation of further trade hostilities, with the trade sanctions already implemented by both sides likely to remain in place.
