United States President Donald Trump heralded a breakthrough in US-China trade negotiations and markets rallied at the end of last week over a de-escalation in tensions between the world’s two biggest economies.
But closer inspection suggests there may not be much substance – at least not yet – to the temporary truce that Trump announced on Friday at the White House after the US and China wrapped up their 13th round of trade talks.
Trump did agree to suspend a tariff hike scheduled for Tuesday on $250bn worth of imports from China.
And the president said the Chinese agreed to buy $40bn to $50bn in US farm products.
But nothing is down on paper and the details for how to ease the trade war are scarce.
China’s state-run media has not even mentioned the promise to buy all the soya beans and other agricultural products. And the negotiators have delayed dealing with the toughest issues for future discussions.
Meanwhile, the US is still scheduled to target another $160bn in Chinese goods starting on December 15, a move that would extend Trump’s tariffs to virtually everything China ships to the US.
Friday’s announcement was “a nothing burger”, said Scott Kennedy, who analyses China’s economy at the Center for Strategic and International Studies.
“I call it the ‘invisible deal’,” Kennedy told The Associated Press. “The only thing that happened Friday was that the US delayed the tariff increase.”
The Trump administration acknowledges that work remains to be done on what it calls “phase one” of the ongoing deliberations with China.
“We made substantial progress last week in the negotiations,” Treasury Secretary Steven Mnuchin said Monday on CNBC.
“We have a fundamental agreement. It is subject to documentation, and there’s a lot of work to be done on that front.”
Mnuchin said he expected that he and US Trade Representative Robert Lighthizer will meet with China’s lead negotiator, Vice Premier Liu He, before a November Asia-Pacific summit in Chile.
At that gathering, Trump and Chinese President Xi Jinping could officially sign off on phase one of the deal.
“It’s curious that Washington and Beijing have not yet put this ‘deal’ in writing,” said Wendy Cutler, a former US trade negotiator now at the Asia Society Policy Institute.
“That suggests that the details may not be worked out yet,” she added. “If that’s the case, we should expect more bumps in the road in the lead up to a mid-November meeting between Trump and Xi.”
Trump emphasised the agricultural purchases he says China has supported. If China ultimately buys the stated amount of goods, American farmers hit hard by the president’s trade wars would benefit significantly.
US farm sales to China have never exceeded $26bn a year, according to the US Department of Agriculture.
China already is a major food importer, as rising incomes boost its appetite for meat, vegetables and higher-quality grains. The communist government has tried to promote self-sufficiency in rice, wheat, dairy and some other commodities. But with a population of 1.4 billion, it cannot meet all its own needs.
Jeff Moon, a former US diplomat and trade official specialising in China who is now president of the China Moon Strategies consultancy, noted that Trump had reason to delay Tuesday’s planned tariff increase.
Trade hostilities are weighing on the US and world economies. Tariffs have pushed up costs for US manufacturers and created uncertainty about when and how the trade wars will end.
“The bottom line is that both sides [on Friday] gave themselves permission to do what they wanted to do,” Moon said.
“China really needs the food, and Trump doesn’t want to impose the [increase in] tariffs,” he added. “That’s the bottom line.”
“It’s in the two countries’ interests to dial down the hostilities,” agreed David Dollar, senior fellow at the Brookings Institution and a former official at the World Bank and US Treasury.
The two countries are deadlocked primarily over US allegations that China deploys predatory tactics – including outright theft – in a sharp-elbowed drive to become the global leader in artificial intelligence, self-driving cars and other advanced technology.
Beijing has been reluctant to make the kind of substantive policy reforms that would satisfy the Trump administration. Doing so would likely require scaling back China’s aspirations for technological supremacy, which it sees as crucial to its prosperity.
“I don’t think China is willing to fundamentally change its system,” Dollar said.
Resolving those issues is largely being pushed to future talks. Over the past 15 months, the two countries have imposed tariffs on hundreds of billions of dollars’ worth of each other’s goods. Beijing has targeted farm products in a shot at Trump supporters in rural America.
Tim Garrett, 63, shares a large farm with his brother in eastern North Dakota, where they grow mostly soya beans and corn. He voted for Trump and said he supports a better trade deal with China. But he is “not sure it’s coming about”.
“I’m not a huge political guy to start with, but China has been ripping us off for years,” Garrett said. “I believe something had to be done. I don’t think it should all be on the backs of agriculture.”