Trump Talks up Trade Deals with China, But Experts See no Big Wins for US
By Megan Cerullo
This week’s summit between President Trump and Chinese President Xi Jinping could ease economic tensions between the countries in the short term, but failed to deliver any breakthrough trade deals, according to some experts.
“I was expecting that China would announce mega purchases of U.S. agriculture, energy and airplanes,” Wendy Cutler, a former negotiator in the Office of the U.S. Trade Representative, told CBS News. “So far, it doesn’t seem like Trump and his team have a lot to show for the visit.”
President Trump on Friday said the meeting in Beijing had produced “fantastic trade deals” and characterized the trip as an “incredible visit,” while Chinese officials opened the door to new areas of cooperation with the U.S.
“It looks like both sides are saying they got somewhere, but we are not there yet — we are still waiting,” said David Meale, head of the China practice at Eurasia Group, a political risk consulting firm. “Neither side has come out with a clear statement of details. I don’t think that means it’s a failure or that those deals don’t exist. They just need to cross the Ts and dot the Is on a few things.
One winner likely to emerge from the talks is Boeing. Trump said on Friday that China had agreed to purchase at least 200 aircraft from the U.S. aviation giant and that the number could eventually grow to 750 planes.
Boeing told CBS News that it viewed the trip as a success and that the company accomplished its “major goal of reopening the China market to orders for Boeing aircraft.”
“This included an initial commitment for 200 aircraft and we expect further commitments will follow after this initial tranche,” a Boeing spokesperson said in a statement.
Yet the initial aircraft order is smaller than some analysts expected before the summit, according to investment advisory firm Capital Economics. Boeing shares fell 3.8% on Friday, a sign that investors were underwhelmed by the deal news.
Mr. Trump also said that China agreed to buy more U.S. oil and agricultural products, including “billions of dollars of soybeans” from American farmers.
A White House official told CBS News that Mr. Trump’s trip had delivered important agricultural agreements that expand U.S. farmers’ exports to China and an aircraft purchase agreement that will boost U.S. manufacturing jobs. More details on the agreements are forthcoming, the official added.
The White House also said the U.S. has established what it called a “Board of Trade” and “Board of Investment” to manage the U.S.’s economic relationship with China.
Non-binding commitments
For now, specifics on the deals remain scant, energy and trade experts noted.
“As far as I can tell, this isn’t confirmed, and we haven’t seen a statement saying that China wants to buy X barrels of oil per day from the U.S.,” said China energy policy expert Erica Downs, a senior research scholar at the Center on Global Energy Policy at Columbia University SIPA. “Saying that China wants to buy more energy from the U.S. will please Trump, but it doesn’t bind China to anything.”
Cutler, now senior vice president at the Asia Society Policy Institute, a think tank focused on trade and investment, said she was expecting more details on renewed Chinese commitments to buy other U.S. farm products, including corn and beef.
Economists also noted that the deals with China Mr. Trump touted remain only verbal commitments, with no guarantee they will materialize.
For example, Mr. Trump’s 2017 trip to China led to an agreement for the state-owned China Energy Investment Corporation to invest nearly $84 billion in shale gas and chemical manufacturing projects in West Virginia. But the plans dissolved as U.S.-China tensions grew.
Trade experts emphasized that U.S. and Chinese officials could iron out such deals in the coming weeks and months.
“This is not their one and only meeting, which could lead to both sides deciding to take their time before they announce anything, rather than rushing,” Cutler noted.
Framework for stability?
Cutler also underlined the potential value of the world’s two largest economies holding constructive talks. Chinese and U.S. officials described the meeting as a way to stabilize the relationship, which deteriorated last year after Mr. Trump imposed tariffs of up to 125% on Chinese imports, prompting countermeasures from China on U.S. products.
“They get to relabel the relationship as stable, and it feels like there is a new framework for how we’re going to engage on the economic front,” Cutler said.
That framework includes the new Board of Trade, which would mediate trade disputes between the countries. As part of that mechanism, the sides would consider lifting tariffs on roughly $30 billion in goods, Reuters reported.
Still, that number is less than 10% of the value of trade between the U.S. and China in 2025, according to Capital Economics.
As of February, China faced a U.S. tariff rate of roughly 32%, according to the Penn Wharton Budget Model, a University of Pennsylvania research group that analyzes the fiscal impact of public policies. Chinese tariffs on U.S. experts average around 10%.
Original source: https://www.cbsnews.com/news/trump-xi-jinping-china-trade-deals-boeing/