US downplays breakthrough chance in China trade meeting

Bloomberg

The Trump administration sought to temper expectations for a swift breakthrough on trade issues with China as a delegation of senior US officials prepares to visit Beijing this week.
“It’s a big, big challenge. There’s a very different system over there and it’s a system that in all honesty has probably worked pretty well for the Chinese,” Trade Representative Robert Lighthizer said at an event at the US Chamber of Commerce in Washington. “It has not worked well for us.”
The US and China could “spend the next year developing how we deal with each other over a period of time,” Lighthizer said.
“You end up learning how to deal with it, how to kind of manage it, between the two of you, and we’re in the early stages of that,” he said.
Lighthizer will be among senior members of the Trump administration travelling to China this week to discuss trade. He will be joined by Treasury Secretary Steven Mnuchin, White House advisers Larry Kudlow and Peter Navarro, and Commerce Secretary Wilbur Ross.
China’s state media confirmed the visit, saying the top economic adviser to President Xi Jinping, Vice Premier Liu He, will meet with the delegation Thursday and Friday.

Softening Expectations
Earlier, Ross played down the possibility of a breakthrough. The meetings will start and the US officials plan to head home by the weekend, though the trip could be cut short “if it’s not satisfactory,” he said in an interview with CNBC.
“You never know where you are until you actually get into the conference room” and an outcome can’t be prejudged, Ross said. “I wouldn’t be going all the way over there if I didn’t think there was some hope.”
President Donald Trump will have the final say on accepting any US agreement with China, Ross said, indicating he doesn’t expect an announcement immediately from the meetings. “Anything that is discussed over there will come back to the president for approval,” he said. “This won’t be suddenly in Beijing a breathtaking release, everything is resolved.”
The White House is threatening to slap massive tariffs on Chinese imports in a bid to narrow a record US trade deficit with China. Beijing’s pledge to retaliate with barriers against US goods has raised the specter of a trade war that the IMF cautions could undermine global growth.

The Trump effect may be weighing on China’s exports
Bloomberg

China’s exporters may be finding it harder to avoid the effect of trade disputes with the US, according to the freshest manufacturing purchasing managers index data. While the official manufacturing gauge and a private counterpart both held up last month, their sub-indexes tracking new export orders both declined. The Caixin Media Co. and Markit Economics Ltd. reading for booked shipments dropped to the weakest level since June 2016.
“It’s particularly striking that export orders are contracting, possibly an indication that tariff talk has turned buyers cautious,” Bloomberg economists Tom Orlik and Fielding Chen said. “Policy makers appear to be taking no chances, with the latest signals showing a slight tilt towards supporting growth.”