Donald Trump says trade deal must force ‘structural change’ to end China’s ‘theft of US jobs’

  • Talks with China must ‘end unfair trade practices, reduce our chronic trade deficit and protect American jobs’, he says in State of the Union address
  • President says before address that he plans to meet Xi Jinping this month
PUBLISHED : Wednesday, 06 February, 2019, 11:30am
UPDATED : Wednesday, 06 February, 2019, 11:12pm

US President Donald Trump said a trade deal with China needs to include “real structural change” to resolve long-standing complaints of unfair practices, as Washington pushes for an enforcement mechanism ahead of a fresh round of negotiations in Beijing next week.

During his nearly 90-minute State of the Union address on Tuesday evening, Trump punctuated his praise of the US economy – “far and away the hottest economy anywhere in the world” – with renewed criticism that Beijing had for decades taken advantage of the country’s “calamitous trade policies”.

“We are now making it clear to China that after years of targeting our industries and stealing our intellectual property, the theft of American jobs and wealth has come to an end,” Trump said, noting his “great respect” for Chinese President Xi Jinping.

“We are now working on a new trade deal with China. But it must include real, structural change to end unfair trade practices, reduce our chronic trade deficit and protect American jobs.”

US President Donald Trump to meet North Korean leader Kim Jong-un in Vietnam for historic second summit

Although he did not announce details of an expected meeting with Xi later this month, which would likely cement the details of a high-stakes trade agreement, he announced a second summit with North Korean leader Kim Jong-un on February 27 and 28 in Vietnam.

The president told a group of television news anchors hours before his address on Tuesday that he plans to meet Xi during his time abroad this month, although it was not clear whether their sit-down would also occur in Vietnam, POLITICO reported.

The South China Morning Post on Sunday cited sources as saying Xi and Trump were also considering meeting during those two days in Vietnam.

As the March 1 deadline looms for Beijing and Washington to reach a trade accord to stave off further tariffs in their months-long trade war, the US will send its chief trade negotiator Robert Lighthizer and Treasury Secretary Steven Mnuchin to Beijing early next week.

If a deal is not reached, the US will raise tariffs on over US$200 billion in Chinese goods from 10 per cent to 25 per cent.

Xi Jinping and Donald Trump ‘may meet in Da Nang, Vietnam’ at the end of February

Beyond China’s trade surplus with the US – which was US$323 billion in 2018, according to Chinese government data – major US complaints that would require Chinese structural reform include forced technology transfer, intellectual property protection, market access, China’s state-backed industrial policies and cyber theft.

Trump also said during his Tuesday speech that the reason he pulled the US out of a decades-old arms control treaty with Russia last week , sparking fears of an arms race, was Moscow’s alleged violations of its terms.

He raised the possibility of negotiating a new agreement to replace the Intermediate-Range Nuclear Forces Treaty that would include China and other countries – an idea Beijing has previously opposed – but said that without a deal, the US would “outspend and out-innovate all others by far”.

On trade, Lighthizer said in a statement after Trump’s address that “confronting China’s unfair trade practices” would help expand America’s export opportunities, strengthen its manufacturing and promote its “leadership in today’s digital economy”.

Donald Trump says trade war will ‘hopefully’ be resolved before March – but not before he’s met Xi Jinping

The newly negotiated United States-Mexico-Canada Agreement – which notably includes tightened intellectual property safeguards and greater US access to Canada’s dairy market – would be “a model for all future trade deals”, he said.

A senior Trump administration official said that through ongoing talks about Washington’s 142 trade demands, the number of items Beijing deemed non-negotiable has been sharply reduced.

This would allow for the discussion of issues such as hacking of US companies, The Wall Street Journal reported on Tuesday.

The most challenging issue was enforcement, the official said, with talks ongoing but details of any possible verification framework remain unclear.

Officials from the two nations met last week in Washington, with the Chinese delegation led by Vice-Premier Liu He.

After two days of talks covering a wide range of sticking points, the Chinese side said that “frank, concrete and constructive discussions have made important progress”.

Wang Huiyao, president of the Centre for China and Globalisation, said it was likely that Xi and Trump would meet in Vietnam.

“Trump already said he will meet Xi . That has been discussed at a working level, basically when Liu He was there. They already talked about that. So I think both of them will sign the deal and that should be relatively easy,” he said.

“Also Vietnam is a good friend of China too. So I think it’s perfect place to meet”.

Wang added that China would buy more American goods, but it would take time to address the structural changes demanded by Trump.