Xi Jinping ‘bolstered Chinese commitments’ to US by taking lead role in trade talks, says White House aide Larry Kudlow

  • Donald Trump adviser says he was impressed by Chinese president’s grasp of detail as he ‘made the pitch himself’ during talks in Argentina
  • Larry Kudlow says it was unusual to see a head of state taking such a direct role in this type of negotiation, but ‘he wasn’t winging it’
PUBLISHED : Tuesday, 04 December, 2018, 1:34pm
UPDATED : Thursday, 06 December, 2018, 6:44am

Chinese President Xi Jinping “made the pitch himself” in Saturday’s dinner with Donald Trump that ended with a truce in the trade war with the US, according to White House economic adviser Larry Kudlow.

Kudlow told reporters outside the White House on Monday that it was unusual to see government leaders taking such a hands-on role in this type of negotiation.

Trump praises talks with Xi as China readies for trade mission

“We’ve never seen that hands-on participation by President Xi before. In fact, that dinner was quite remarkable,” Kudlow said.

“President Xi engaged in a level of detail – you could even say he was selling this, which was, in my opinion, quite unusual for the head of state. Guys like me are supposed to know the details. He did. He made the pitch himself.

“And [Xi] wasn’t winging it, he was well prepared. And so I was impressed with that and I felt that bolstered the Chinese commitment. I may be wrong, but I believe it did,” Kudlow said.

The dinner ended with an agreement to suspend tariff increases for 90 days while the two sides continued negotiations on ending a dispute that has disrupted billions of dollars of trade between the world’s two biggest economies.

Kudlow said that earlier talks with Vice-Premier Liu He, Xi’s key economic adviser, marked the first time Chinese officials had promised “immediate” action to cut tariffs and address structural issues, such as intellectual property theft and forced technology transfer.

But there remains much scepticism about the extent to which Beijing will deliver by the end of the grace period and China has yet to publicly provide further details of what it had agreed to in the talks.

On Monday US Treasury Secretary Steven Mnuchin told CNBC that China had made trade commitments worth around US$1.2 trillion, but stressed that the details still need to be negotiated.

“I think there is a specific understanding that we are now going to turn the agreement the two presidents had into a real agreement in the next 90 days,” Mnuchin told reporters separately at the White House that day.

“I’m taking President Xi at his word, at his commitment to President Trump. But they have to deliver on this.”

US expects immediate action from China after trade truce: Trump adviser

Kudlow initially said the Chinese had 90 days from January 1 to come up with “structural changes” regarding intellectual property protections, forced technology transfer, state aid and other issues.

The White House later corrected him to say that the 90 days actually began immediately after the talks had concluded on Saturday.

However, Chinese ambassador to the United States Cui Tiankai has since pointed out that negotiators will actually have fewer than 90 days to reach a deal because holidays – including Christmas, New Year and Lunar New Year – will eat into the time available.

The South China Morning Post reported on Monday that China was expected to send about 30 officials to Washington for discussions next week but it was not known who would be in the delegation.

Kudlow said US Trade Representative Robert Lighthizer would be leading the American team, adding that Mnuchin would be very involved in the process.

He said that in his talks with Liu, the vice-premier had stressed that changes “with respect to tariffs and non-tariff barriers and other structural issues that we’ll get into in a few moments, would begin immediately”.

Kudlow continued: “And I said, ‘What do you mean, immediately?’ And he said, ‘Immediately’.

“So we’ll see. But, I think, I can tell you I’ve never heard that ‘immediately’ commitment before.”

But without a detailed agreement, observers questioned how far both sides would be willing to go if they were to reach a more lasting deal within the 90-day window.

How ceasefire might affect the fortunes of China’s partners and rivals

Shi Yinhong, an international relations expert from Renmin University in Beijing, said China’s goal was to ease tensions by importing more US products, but Washington’s demands for “structural changes” went beyond this, adding: “For China, it’s really a difficult task to end the trade war in 90 days.”

He said the US’ demands on technology transfer and state aid suggested it wanted to change China’s industrial policy and development path and the “big question” was how far it was willing to scale down its demands in this area.

“In this sense, no matter who leads the negotiation team, be it Lighthizer or someone else, the strong US stance against China will not change.”

Shi also argued that if China were to commit to the figure of US$1.2 trillion, the move would mark a “gigantic concession”.

Liu Weidong, from the Chinese Academy of Social Sciences, said the choice of Lighthizer, a noted China hawk, to lead the talks suggested the US hoped to keep the pressure on China, but said the selection should not be “over-interpreted”.

He also said the US$1.2 trillion figure was a “a bit unrealistic” since it far exceeded current trade volumes, which had stood at around US$710.4 billion last year.

Christopher McNally, a political economy professor at Chaminade University in Hawaii, said: “For the Chinese side, this is a make-or-break opportunity – it is by far too early for China to engage in an all-out competition with the US.

“China needs a deal to create sufficient development space for the next 10 years. Naturally, there are pressures on the US side as well, but the stakes are higher for Beijing.”

Additional reporting by Sarah Zheng, Reuters and Bloomberg