Trump Trade Adviser Defends China Deal Before Congressional Skeptics

WASHINGTON — Robert Lighthizer, the president’s top trade adviser, cautioned lawmakers on Wednesday that hurdles remain to reaching a significant trade deal with China but said the administration’s talks represent the best hope for resetting economic terms between the two nations.

Mr. Lighthizer, in testimony before the House Ways and Means Committee, confirmed that the United States would formally abandon its plan to raise tariffs on $200 billion in Chinese imports. President Trump said over the weekend that he would delay the higher tariffs, which were expected to kick in on Saturday, citing “significant progress” in talks with Beijing.

But Mr. Lighthizer struck a more circumspect tone than Mr. Trump, who in recent days has predicted a “very, very good chance” of striking a deal with China and turned his attention toward a signing ceremony, potentially next month, at Mar-a-Lago, his Florida estate, with President Xi Jinping of China.

“If all works well, we’re going to have some very big news over the next week or two,” Mr. Trump said Sunday evening.

Mr. Lighthizer told lawmakers that he and his negotiators are maintaining a tough line with the Chinese, repeatedly using the word “if” when talking about the potential for reaching a deal with Beijing. If an agreement can be reached, he said, it would include concrete commitments to make structural economic reforms, like curtailing state subsidies, ending the forced transfer of intellectual property and opening up markets to foreign competitors, he said.

The Chinese have so far resisted making big concessions in those areas, people familiar with the negotiations say, prompting concern from business leaders, trade groups and some members of the Trump administration that the president might accept a weaker deal to end the monthslong trade war and declare victory on the 2020 campaign trail.

In candid testimony, the trade representative said he was not sure that his get-tough approach would work but said it was better than the alternative.

“I honestly believe that good people tried for 20 years the multilateral approach, the talk approach and the ‘let’s all go along get along’ approach,” Mr. Lighthizer said, as he hoisted a piece of paper featuring a chart showing the steadily increasing trade deficit in goods between the United States and China. “They just demonstrably failed.”

“Is this perfect? I’m not going to say it’s perfect,” he said of the evolving deal. “But at least it’s leading to results where everything else didn’t.”

Mr. Lighthizer said the Chinese want the United States to lift tariffs it has imposed on $250 billion worth of goods, but he made no promises that would happen without a tough deal.

The trade adviser also played down the idea that Mr. Trump is growing impatient and wants to strike an agreement. He said the president wants a deal, but only if it resolves the big concerns that prompted the United States to start a trade war. “His instructions to me are: You have to get a great agreement. If we have no agreement, we’ll just wait until we can get a great agreement,” Mr. Lighthizer said.

But he acknowledged the difficulty of ensuring that China would adhere to any agreement in the coming years, calling that “a challenge that goes on for a long, long time.”

Mr. Lighthizer described a complex enforcement mechanism the two nations are discussing to ensure that China would not renege on its commitments. Under the evolving pact, the Chinese have agreed to periodic meetings at the levels of office director, vice minister and minister that would allow the United States to keep tabs on China’s behavior and air complaints from companies about unfair business practices. If China fails to keep its agreement, the United States would respond “proportionally but unilaterally,” he said.

Politicians of both parties, academics and the business community have gradually formed a consensus in recent years that China has failed to keep the commitments it made when joining the World Trade Organization in 2001, and that practices like subsidizing its own companies and blocking foreign competitors from its market have unfairly damaged American industries and workers.

But those critics have been divided over the president’s choice of tariffs as his favored weapon. In a report released by the American Chamber of Commerce in China this week, companies reported declining optimism about their ability to operate in China and cited “bilateral tensions” as a top challenge.

On Wednesday, both Democrats and Republicans shared concerns about the damaging effects of Mr. Trump’s tariffs and China’s retaliatory levies on products made and purchased in their districts, including cribs, robot vacuums, soybeans, Hollywood films and rice.

Mr. Lighthizer admitted that tariffs were “a blunt instrument” but said, “We don’t have any other.”

Mr. Trump has wielded tariffs in nearly every trade dispute, imposing steel and aluminum levies on America’s biggest trading partners and threatening tariffs on imports of cars and car parts. Lawmakers and business groups are growing concerned that the administration lacks an exit plan for the tariffs, even once the United States reaches trade agreements with other nations.

Both Republicans and Democrats have complained about the administration’s failure to remove metal tariffs on Canada and Mexico, despite reaching a new United States-Mexico-Canada Agreement. A growing number of lawmakers have warned that they will not ratify the new trade deal, which replaces the North American Free Trade Agreement, if Mr. Trump does not remove the tariffs.

Mr. Lighthizer, who negotiated the new North American trade deal and tried to assure lawmakers that the administration was working to minimize the tariffs, saying he is trying to reach an agreement with Canada and Mexico to limit their exports of steel and aluminum into the United States. Mr. Trump labeled global metal imports a threat to national security last year and imposed tariffs to stem their flow.

Other members of the administration have also indicated that the issue will soon be addressed.

“I think what we’re moving toward is a resolution over the tariffs, possibly to be replaced by a reasonable quotas with which Canada and Mexico can live, and have the retaliatory tariffs removed,” Sonny Perdue, the agriculture secretary, said at a congressional hearing on Wednesday.

Earlier this month, Mr. Perdue said he told Mr. Trump and Mr. Lighthizer that he believed the steel and aluminum tariffs on Canada and Mexico should be removed.

Source: NYT

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