Top US negotiator Robert Lighthizer ‘read Chinese the riot act’ to get trade talks back on track, Larry Kudlow says
- US trade representative was not pleased when deputy-level negotiations hit an impasse last week, according to the White House economic adviser
- Kudlow appeared optimistic during an interview on CNBC, citing ‘terrific’ progress in talks
Trade talks between the United States and China collapsed at one point last week because of an impasse at the deputy level and were only salvaged when the chief US negotiator harshly reprimanded the Chinese side, White House economic adviser Larry Kudlow revealed on Thursday.
“The first day of the deputies’ meetings went very poorly,” Kudlow told CNBC, referring to discussions on February 19 led by deputy US trade representative Jeffrey Gerrish. “And the second day was cancelled because of that.”
After the breakdown of the discussions, US trade chief Robert Lighthizer “read them the riot act”, Kudlow said.
Chinese Vice-Premier Liu He “responded ... and all of a sudden everything picked up”, he said.
Kudlow, who is director of the National Economic Council, was part of the high-level discussions, which were extended from two days to four as both sides sought to reach consensus on a number of issues.
“Vice-Premier Liu He and his top deputies worked very well with us – very well with us – in those last three or four days and the extended weekend,” he said.
US, China poles apart on how trade deal should be enforced
Considered a hardliner on trade, Lighthizer won bipartisan praise from lawmakers on Wednesday for his tough stance on Beijing during a hearing before the US House Ways and Means Committee.
The chief negotiator had time and again “developed a vision that many of us on this committee will support vigorously”, said Representative Richard Neal, Democrat of Massachusetts and chairman of the committee.
“We believe that the structural problems that [face] America, as it faces its trade relationship with China, are well observed” by Lighthizer.
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But since US President Donald Trump announced on Friday that he was postponing the tariff increase on US$200 billion of Chinese imports, tensions have risen between him and Lighthizer, according to a recent report by The New York Times.
The two publicly sparred last week over the use of memorandums of understanding (MOUs) as the format for a documented deal, with Lighthizer asserting that they were effectively binding contracts, only to be overruled by Trump, who called them a “waste of time”.
Lighthizer eventually capitulated and said MOUs would from then on be called “trade agreements”.
“As far as daylight between President Trump and Mr Lighthizer, I think that’s just untrue,” Kudlow told CNBC. “Bob Lighthizer has done a terrific job, he’s the best trade lawyer in the business, and President Trump is very close to him.”
Providing an update to lawmakers on the status of negotiations during Wednesday’s hearing, Lighthizer said that “much still needs to be done both before an agreement is reached and, more importantly, after it is reached, if one is reached”.
But he confirmed that the sides had come to a consensus on a mechanism of enforcement.
Can China offer the US a level playing field to end the trade war?
Kudlow appeared notably optimistic on Thursday, citing “terrific” progress and predicting approval from China’s top leadership on the terms of the deal being proposed by the US.
“The Chinese side has to come back and agree,” he said. “I believe they will.”
Documents had already been prepared detailing agreements on structural issues such as theft of intellectual property and forced technology transfer – as well as some non-tariff barriers – Kudlow said, adding that the “de-emphasis of [Made in China] 2025 and the significant reduction of China subsidies to those target [industries] is part of the documents”.
“It’s a question now of waiting for the other side to come back … and shall we say, sign on the dotted line,” he said.
Xi to head to Italy, France and Florida on trade and tech missions
US Treasury Secretary Steven Mnuchin said on Thursday that the US was working on a 150-page document that included “very detailed agreement for some very significant commitments”.
Also speaking to CNBC, Mnuchin said the commitments were structural, “but we still have more work to do. And we hope to … make progress this month, and if we do there would be a summit between the two presidents.”
Kudlow said he expected a meeting to happen in late March at Trump’s Mar-a-Lago resort in Florida.
