Challenge for China-U.S. Trade Truce: Specifics

The new challenge for trade negotiators from China and the U.S. will be to clarify exactly what was decided by last Friday’s truce in their simmering trade war.

President Donald Trump says the U.S. will suspend plans to increase tariffs tomorrow on $250 billion worth of Chinese goods. He says China has agreed in return to double its purchase of American farm products per year to at least $40 billion.

Trump describes last Friday’s result as “by far the greatest and biggest deal ever made” for U.S. farmers. But China has not publicly confirmed the $40 billion figure or indicated whether the number is a firm commitment or an aspirational goal. Nor has it indicated the timing of any upswing in purchases.

Sources tell The Wall Street Journal that Beijing insists that any hike in buying must be in line with actual demand and comply with World Trade Organization rules against distorting markets. Reuters notes that China offered last year to buy $70 billion worth of U.S. goods during a lull in the trade war.

Trade observers say that the primary outcome is a delay in returning to the main and far more sensitive demands that prompted the trade war: U.S. demands for better intellectual property protection and an end to forced technology transfer.

Some experts believe China is in no rush to finalize a deal on those points, believing that Trump may feel pressured to compromise on a broader deal as his re-election campaign gears up next year. Other observers warn that too much delay risks a return to a harsher U.S. position—or the prospects of relaunching negotiations with a new president.