White House senior economic adviser Larry Kudlow said Tuesday the administration hopes China will begin “very soon” to make significant purchases of U.S. agricultural goods as a goodwill gesture — and ultimately as part of a final trade deal.
“I’m going to play that on the optimistic side. Going over there is a very good sign,” Kudlow told reporters. He confirmed that a senior U.S. official will travel to China for the first face-to-face meeting of top negotiators since President Donald Trump and Chinese President Xi Jinping agreed late last month to restart trade talks that had stalled in May.
U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin spoke over the phone with their Chinese counterparts on Thursday, which resulted in a trip to China being planned for next week, POLITICO reported Monday.
A U.S. official confirmed a Bloomberg report on Tuesday that Lighthizer would travel to Shanghai to meet with Chinese officials Monday through Wednesday of next week. Chinese Vice Premier Liu He and Commerce Minister Zhong Shan will lead the talks for Beijing. A White House spokesperson referred questions about the trip to the Office of the U.S. Trade Representative, which didn’t respond to an inquiry.
Trump said he secured a commitment from Xi at the G-20 meeting last month that Beijing would buy more U.S. farm goods, but those purchases have yet to fully materialize. Trump has long viewed massive purchases of agricultural goods by China as a vital part of negotiations to end the trade war, which the U.S. launched to address policies and practices the administration says result in the forced transfer of U.S. technology and theft of intellectual property.
“We haven’t had a guarantee of that, but I wouldn’t be surprised if we didn’t [see] a lot of positive news on that coming up,” Kudlow said about the potential for new agricultural purchases.
Agriculture Secretary Sonny Perdue said Beijing has made some agricultural purchases, but not enough.
“As you all know, there has been a 20-million-metric-ton commitment on soybeans. I think the latest numbers I saw this week, I think we were up to 13.67 [million], if I recall directly,” he told reporters Tuesday. “So they still have a ways to go, and that’s what the president is reminding them of as well.”
Kudlow said the administration wants the talks to return to where they were in early May, before U.S. officials say China altered a draft text by rejecting U.S. demands that Beijing amend its laws to meet commitments such as prohibitions against forcing U.S. companies to surrender technology as a condition of doing business in the Chinese market. It is not known whether China will return to the previous version of the text.
It also still unclear whether China is willing to fully agree to U.S. demands that Beijing make deep structural changes to a state-run economic model which the U.S. contends steals American innovation and technology. China has also laid out demands that a deal must be balanced, result in full removal of tariffs on more than $250 million worth of exports to the U.S., and that expectations of Chinese purchases of agricultural goods be realistic.
U.S. treatment of blacklisted Chinese telecommunications company Huawei has also added a new wrinkle in the talks. People close to the talks have said the U.S. has been reluctant to ease up on its crackdown against Huawei until China resumes purchasing U.S. farm goods.
The Chinese government has been pressing the U.S. to remove the tech giant from the Commerce Department’s so-called Entity List, which effectively prohibits U.S. companies from doing business with the firm. U.S. semiconductor companies that count Huawei as a major customer have been pressuring the administration to at least grant waivers that would allow them to resume certain transactions.
Commerce Secretary Wilbur Ross told Bloomberg Television on Tuesday the department has received 50 applications for waivers from 35 companies, and that decisions would be made “within the next few weeks.”
Kudlow said a meeting at the White House on Monday between Trump and chief executives from major tech companies, including Google, Intel and Qualcomm, was “really positive.” Trump agreed during the meeting to a timely process for considering export waivers.
Kudlow said the administration still has “enormous national security concerns” about Huawei, which has been accused of doing the Chinese government’s bidding in the foreign markets it serves, as well as violating U.S. sanctions against Iran and North Korea. He said the company remains on the Entity List.
“We’ll move ahead and process applications for telecom sales, chip-related sales that do not impinge on the national security concerns,” he said. “If you can buy this stuff elsewhere outside the United States, then we’re OK with it from our own people.”