Over the weekend, President Trump tweeted that he would increase tariffs on Chinese goods if a trade deal is not reached by Friday. AgDay host Clinton Griffiths caught up with Jim Wiesemeyer, ProFarmer’s policy analyst to get down to the details on what you need to know about this latest twist in trade with China.
“President Trump threatened to invoke additional tariffs and on an expanded amount of Chinese products if there was no progress are an actual agreement announced by the weekend,” Wiesemeyer said.
Additionally, despite scheduled negotiations in D.C. this week there are reports China’s lead negotiator, Vice Premier Liu He was not on his previously booked flight to Washington. Wiesemeyer said there are some reports no trade officials boarded the plane, but that can’t be confirmed. Additionally, he added this does not mean negotiations are postponed, as they still have time to catch another flight. China had previously announced plans to send a trade delegation of more than 100 negotiators to Washington this week, a sign seen by many that both sides sought to wrap up talks.
Why is Trump contradicting his Friday comments indicating an agreement was near?
Just Friday President Trump and Treasury Secretary Mnuchin said significant progress had been made on the deal and agreement was near. Wiesemeyer said he did notice that Trade Representative Lighthizer did not comment during last week’s Beijing talks.
“Apparently Beijing wanted to go back to some of the secret text, if you will, that they had already agreed on and that didn't sit well with President Trump and probably not Lighthizer,” Wiesemeyer explained. “That signals that China wants what we would call a soft agreement. And the U.S. wants a hard agreement. So right now it's all in flux.”
Does Trump’s Friday deadline put China in a box?
“The Chinese officials even last week were moving people away from any hard deadline,” Wiesemeyer said. “Trump likes to force deadlines. And so what I read from them based on talks with China watchers that we contact, is that this forces you to make decisions and Trump knows that. Xi wants everything concluded before he will agree to any signing ceremony with President Trump. He does not want to leave any loose ends to be decided between the two, for fear that Trump will walk away.”
The Chinese culture and people would not support a move that makes President Xi look weak.
Is completing a deal a longshot now?
“Many agricultural lobbyists that I've talked with, a few farmers, lots of traders over the weekend they are all saying, ‘my goodness, we have to at least up the odds a tad that this thing could fall apart,’” Wiesemeyer said. “Now I'm not predicting that."
The deal collapsing would have major implications on the U.S. ag economy. It would also impact other trade deals the U.S. is negotiating, Wiesemeyer said adding Congress would not view a collapse of this agreement favorably.
“I think we're getting ahead of ourselves on that,” he said.
What’s the No. 1 factor to watch at this point?
Wiesemeyer is watching to see if any trade negotiators from China arrive in the U.S., if so when? Two: will their top negotiator Lou be on a plane to the U.S.?
“That will tell us a lot because initially last week they were going to send over 100 Chinese officials. That ups the odds that at least China thought that an agreement was possible,” he said. “This could be a kerfuffle in the in the long run, but right now, it's just murky with details unknown. And in the ag marketplace, any uncertainty is always, always negative.”
Watch Tuesday morning for a more analysis on the China trade situation.