Trump Is Shifting to Dealmaking Mode on China

Hindustan Times

3 days ago

As the U.S. heads toward fresh trade talks with China next week, President Trump is increasingly focused on trying to strike an economic bargain with Beijing, one that aims to open the Asian giant to more American business and technology.
For much of this year, the administration has used the pressure of tariffs to redirect supply chains away from China. The goal has been to weaken Beijing's geopolitical influence and press American businesses to bring manufacturing jobs back to the U.S.
Now, people familiar with White House thinking said, he wants to do deals.
The White House is now actively encouraging China to buy more American technology, underscored by the lifting of a ban this month on sales of Nvidia's H20 artificial-intelligence chips to Beijing, reversing a policy aimed at protecting U.S. national security.
'The president wants an economic deal, and he's pushing very hard to negotiate that deal' with China, said Stephen Biegun, who served as deputy secretary of state during Trump's first term.
In response to questions from The Wall Street Journal, White House deputy press secretary Anna Kelly said, 'President Trump's first instinct is always diplomacy, and as the 'Dealmaker in Chief,' he always wants to secure better deals for the American people.'
She said the administration is 'working to level the playing field for American farmers and workers and build secure supply chains for American consumers,' adding that China is again shipping rare-earth magnets to the U.S.
Beijing had restricted exports after Trump imposed steep tariffs on China.
Right now the U.S. levies are in the range of 30% to 50% on Chinese imports—higher than the levels negotiated in recent days with Vietnam, Japan and Indonesia. And the administration has been pressuring countries to build a so-called tariff fortress against the rerouting of Chinese goods through their territories.
Specifics on how the U.S. would police so-called transshipments from China through third countries couldn't be determined. China has said it would retaliate against any country that strikes trade deals with the U.S. at China's expense.
Chinese negotiators, led by Vice Premier He Lifeng, leader Xi Jinping's economic right-hand man, will likely raise the issue in future discussions with the Trump team, according to people who consult with Chinese officials.
A diplomatic push is already under way, as senior officials from both nations are in talks over a potential summit between Trump and Xi. One option would be meeting on the sidelines of an October gathering of Asia-Pacific leaders.
Trump said Tuesday he could meet with Xi 'in the not too distant future.' Trump also said the U.S. is 'getting along with China very well. We have a very good relationship.'
Now both sides are working to gain more time to negotiate a broad deal. Treasury Secretary Scott Bessent said he would meet with his Chinese counterparts in Stockholm early next week to work on an extension of a tariff truce set to expire Aug. 12.
He said a key element of a China deal involves the country's buying more American products. 'We want them to open up,' Bessent told Fox Business on Tuesday. 'They have 1.4 billion people with a very high savings rate. They have the potential for a big consumer economy.'
So far, Xi has shown little interest in changing China's state-driven economic model, which encourages domestic overproduction and global exports. Instead, recent actions to boost sluggish growth have doubled down on the old playbook. These include continued infrastructure spending, highlighted by a new hydropower dam estimated to cost at least $170 billion, and a trade-in program that has helped appliance and electronics manufacturers clear excess inventory.
That raises the question about whether the Trump administration can realistically get China to make significantly more purchases of agricultural and industrial products as the president's first-term trade deal with Beijing sought to do. China fell short of its purchase commitments for such products under that 2020 deal, known as 'Phase One.'
The coming talks in Stockholm are the latest in a series of high-level meetings between Washington and Beijing. Discussions in Geneva in May resulted in a 90-day pause on steep tariffs. A follow-up meeting in London last month led both sides to ease some export controls. The U.S. relaxed restrictions on sales of jet engines and chip-design software, while Beijing renewed shipments of rare-earth magnets.
The Trump administration's recent reversal of chip-related export controls has stirred up fear in Washington and elsewhere that it would negotiate away tools designed to protect national security.
Rush Doshi, a former National Security Council official who is now at Georgetown University and the Council on Foreign Relations think tank, said Trump seems to be at odds with some of his staff who are focused on ensuring the U.S. has long-term advantages over China.
'He appears focused on a deal with China and a meeting with Xi in the fall,' Doshi said. 'If the president keeps reversing his own policy, or decisions made by his staff, Beijing simply will not take us seriously,' Doshi said.
In contrast to Trump's desire for a deal, Xi is more interested in playing for time to gain an edge in what he sees as a protracted battle with the U.S. To that end, Beijing is planning to dangle to the Trump team some more purchases of American farm, energy and other products and more Chinese manufacturing investments in the U.S., according to the people who consult with Chinese officials. That proposition could be attractive to Trump for his goal of reindustrializing America.
In return, it will also make a case in the coming negotiations that China should be allowed to buy goods it really needs, such as American chips and other tech products that are now subject to U.S. export controls.
'China thinks this has been better than they had expected,' said Yun Sun, director of the China program at the Stimson Center, a Washington think tank, referring to recent developments in Washington. 'Trump wants a deal, and China is willing to play ball.'
Write to Lingling Wei at [e-mail]