Having just reached a trade agreement with Mexico, the Trump administration is putting trade negotiations with China on the back burner for now.
On Aug. 27, the United States signed a new trade deal with Mexico to replace the North American Free Trade Agreement, and negotiations with Canada are next, President Donald Trump said in a phone call with Mexican President Peña Nieto from the Oval Office.
Meanwhile, regarding China, “it’s not the right time to talk,” Trump said.
“And as you know, we are working—unrelated to this (U.S.-Mexico trade deal)—we’re working very much with other countries. China is one. They want to talk, and it’s just not right time to talk right now, to be honest, with China. It’s been too one-sided for too many years, for too many decades, and so it’s not the right time to talk,” he said, according to a White House transcript.
“But eventually, I’m sure that we’ll be able to work out a deal with China. In the meantime, we’re doing very well with China.”
Before the Mexico deal was reached, Larry Kudlow, who heads the White House’s National Economic Council, said China has been increasingly isolated in the trade arena, with Washington moving toward trade deals with the European Union and with Mexico, according to an Aug. 3 Reuters report.
“We are coming together with the European Union to make a deal with them, so we’ll have a united front against China and, I think, most of our trade team would tell you, we’re moving close on Mexico,” he said. “China is increasingly isolated with a weak economy.”
Kudlow warned China not to underestimate Trump’s resolve when it comes to trade.
In an interview with CNBC on Aug. 16, Kudlow said China’s economy looks “terrible,” and investment there is “collapsing.”
He said the latest data showed that “retail sales, business investment is collapsing” and “there may be some manipulation” in the currency.
“Investors are moving out of China because they don’t like the economy,” he added.
According to scholar and author He Qinglian, a widely respected expert on the Chinese economy who lives in the United States, the core issue for Washington is China’s theft of U.S. intellectual property and using counterfeit goods to take U.S. companies’ market, and the “Made in China 2025” initiative.
The initiative aims for China to become a major manufacturing power in direct competition with the United States and has been deemed threat to U.S. technological leadership by the Council on Foreign Relations think tank.
He Qinglian said that as long as the issue of intellectual property theft in particular is not resolved, it will be difficult for U.S.-China trade negotiations to achieve substantial progress.
Since Trump was elected, the United States has formed free trade partnerships with several countries, including those part of the European Union, Mexico, South Korea, and soon Canada. The one-on-one negotiations with these countries have formed a new type of alliance, representing a large part of the global market.