White House backing off demand for written commitments on China trade deal enforcement, Grassley says


Republican Senate Finance Chairman Chuck Grassley of Iowa said Tuesday that the Trump administration had shifted its stance on enforcement of the China trade deal and was putting less emphasis on Beijing making structural changes to its laws.

Asked if the White House had moved away from written commitments in the “phase one” trade deal reached Friday with Beijing, Grassley told the Washington Examiner, “Not on the substance of the particular points but on enforcement, I think, yes.”

Trade talks between the United States and Beijing broke down earlier this summer when the Trump administration accused China of reneging on promises it had made in writing, which Beijing contended it never made. At the time, the U.S. demanded that China make changes to its laws regarding intellectual property and technology transfers. The White House is taking a different approach this time, Grassley indicated.

“At the time in May, they were insisting upon changes in the law in China,” Grassley said. “So I think what is different now … is that they don’t change their law but when there is a dispute of whether or not this agreement is being carried out in good faith, there is a dispute resolution process in place.”

The White House and Beijing announced a deal Friday, but the two sides still have have a long way to get the deal finalized, Treasury Secretary Steven Mnuchin said Monday. Provisions of the deal covering intellectual property rights, financial services, currency, and China’s agricultural policies have yet to be written down, a process that they will engage in over the next several weeks. “We have reached a fundamental agreement, and now it is subject to making sure the document reflects that,” Mnuchin said.

Grassley said that situation is why the administration is refusing to roll back any of the current tariffs, which stand at 25% on 250 billion worth of Chinese goods and 15% on another $300 billion, as well as insisting that it could still impose a further 15% tariffs on $80 billion worth of goods in December: The Trump administration needs to have something to hang over China should dispute resolution be necessary.

“I believe that you will not have the December tariffs go into effect, but I think that you will have that tariffs that are at 25% stay there to encourage further negotiations,” Grassley said. He added that the December tariffs could still go ahead if “what was announced Friday is not on paper as what we expected it to be.”

Grassley added that the chances for a successful “phase two” of Friday’s deal are limited because the Chinese negotiators will likely try to wait out the election results to see if they can deal with a different president.

“It’s kind of a gamble on their part because if the president is re-elected, and I think he will be, they could have even tougher negotiations in a second term of Trump. So I think they ought to get what they can get right now,” he said.

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