Trump Promotes Deals in China, but Hints at Long Trade Fight Ahead

Author /  KEITH BRADSHER 2017/11/14 16:18:05 Source:The New York Times

BEIJING — President Trump’s $250 billion in Chinese business deals probably won’t be enough to stop a trade fight.

Mr. Trump met with his Chinese counterpart, Xi Jinping, in Beijing on Thursday, offering personal praise and qualified criticisms of China’s trade practices. China, in return, offered modest concessions on some thorny trade issues. The two sides also pointed to what they claimed were billions of dollars of deals between Chinese and American companies to show face-saving progress.

But behind the scenes, Washington and Beijing are gearing up for what may well be months of contentious relationsbetween the world’s two largest trading partners.

After initially focusing this year on renegotiating the North American Free Trade Agreement and the United States’ free-trade pact with South Korea, Trump administration officials plan to pursue previous promises to investigate what they call Chinese theft of American intellectual property. Lawmakers also plan to intensify scrutiny of Chinese investments in sensitive areas of the American economy.

Mr. Trump hinted at coming tensions on those fronts on Thursday, saying he hoped to address “the chronic imbalance in our relationship as it pertains to trade.”

“This includes addressing China’s market access restrictions and technology transfer requirements,” he said, “which prevent American companies from being able to fairly compete within China.”

Both countries face pressure to show their reasonable sides ahead of what could be a difficult fight.

Mr. Trump made harsh criticism of trade with China a centerpiece of his campaign for president and faces pressure to deliver on promises to level the playing field and close the yawning American trade deficit with China. At the same time, he is seeking China’s help containing North Korea, and on other issues.

Mr. Trump struck a somewhat more conciliatory tone in front of his Chinese hosts. While China’s trade practices are unfair, he said, that stemmed mainly from what he called the failings of his predecessors.

“Right now, unfortunately, it is a very unfair and one-sided one,” Mr. Trump said of the two countries’ trading relationship. “But I don’t blame China, after all. Who can blame a country for taking advantage of another country for the benefit of its citizens?”

Mr. Xi faces his own pressures. Though he solidified his political base at a major Communist Party meeting last month, he must contend with a maturing economy now saddled with a mountain of debt. He is also leading an ambitious plan to upgrade China’s technological know-how — an effort that could be complicated by a trade fight with the United States.

The two sides took pains on Thursday to show common ground. The Chinese government announced near the end of Mr. Trump’s visit that it planned to reduce tariffs on imported cars and to open up its financial sector to greater competition. But Chinese officials offered no promises on when or how much they might be willing to move on either issue.

The Chinese offers represented a bid to strengthen support for a less assertive American trade policy by reaching out to two industries that have a lot to lose. One is Wall Street, which has profited handsomely from helping Chinese companies and the Chinese government to buy American companies and real estate. The other is Detroit’s automakers, which have seen strong sales in China of cars built almost entirely in Chinese factories by Chinese workers and robots using Chinese parts. Thanks to Chinese tariffs, cars made in the United States are too expensive to compete broadly in China.

But the Trump administration’s negotiators made little attempt during the visit to seek such industry-specific promises, believing that previous efforts had resulted in little progress.

Instead, Mr. Trump oversaw on Thursday the signing of more than $250 billion in largely symbolic business deals.

Most of them appeared to be the kinds of deals that American companies have long struck in China.

Qualcomm, the chip maker, said on Thursday that it had struck deals with Chinese smartphone makers to sell them a total of $12 billion in components over the next three years. Qualcomm already counts on China for or than half of its revenue, and the deals it signed on Thursday were with existing customers.

Boeing said it had agreed to sell planes valued at $37 billion at list prices to Chinese customers. Financial terms were not disclosed. Air Products & Chemicals, an industrial gases company, said it would build a $3.5 billion plant with a Chinese partner to turn coal into gases, adding that it already supplied gases to the first phase of the project, in the Chinese city of Yulin.

Trump administration officials and some business executives said the deals would not have occurred without Mr. Trump’s visit. “This event helped make this one happen,” said Mitch Snyder, the president and chief executive of Bell Helicopter, a unit of Textron, which signed an agreement on Wednesday to deliver 50 five-person Bell 505 light-duty civilian helicopters built in Texas. He declined to disclose a price.

Errol D. Rice, the executive vice president and managing director of the Montana Stockgrowers Association, said that a $300 million beef deal signed on Wednesday with JD.com, a Chinese electronic commerce company, had happened only in the last few weeks. The Chinese ambassador to the United States had expressed interest in September, he said, and within three weeks JD.com was negotiating to buy $200 million worth of Montana beef over the next three years and to build a $100 million beef-processing facility in southern Montana.

One new agreement involved Alaskan natural gas. The state of Alaska signed a deal with Sinopec, a Chinese oil giant, and Chinese banks for the construction of a natural gas pipeline from near the North Slope of Alaska to a port, and for the construction of a liquefied natural gas loading terminal. China would then buy much of the gas, in a deal that American officials said could be worth $40 billion or more in the coming years.

But the agreement fell short of a deal.

“We are really positive about this project, but what we are going to sign this time is a letter of intent for mutual cooperation, not a contract,” said Lu Dapeng, the press office director of Sinopec. “The area definitely has the resources, but it still requires extensive research and analysis to determine how big is the market and then to decide on the scale of the final cooperation accordingly.”

“This needs time,” Mr. Lu added.