If all you had to go one were the soundbites from Bob Lighthizer’s testimony before the House Ways and Means committee on Wednesday, you might come away thinking the US and China were miles away from striking a final deal on trade.
Bob spent quite a bit of time this week explaining to lawmakers that while progress has indeed been made, the two sides are still haggling over the more contentious points and on top of that, enforcement promises to be just as difficult as you’d imagine it might be given the sheer scope of what it is the administration is trying to accomplish in rewriting the rules of trade and commerce between the world’s two largest economies.
Here, for those who missed it, is one of the key quotes from Lighthizer’s remarks on the Hill:
If we can complete this effort – and again I say ‘if’ – and can reach a satisfactory solution to the all-important outstanding issue of enforceability as well as some other concerns, we might be able to have an agreement that turns the corner in our economic relationship with China. Much still needs to be done, both before an agreement is reached, and more importantly, after it is reached.
That doesn’t exactly scream “deal imminent”, but according to the ubiquitous “people familiar with the matter”, Trump officials are hard at work cobbling together a “final trade deal” that Trump and Xi may sign “within weeks”.
That’s according to Bloomberg, who broke the “story” on Thursday afternoon, during an otherwise lifeless session on Wall Street.
“The US is eyeing a summit between the two presidents as soon as mid-March [but] the planning has been complicated by Xi’s need to lead China’s annual National People’s Congress in early March, as well as make other foreign trips”, the sources added.
This comes hot on the heels of upbeat comments from Steve Mnuchin, who spoke of a 150-page agreement on CNBC Thursday morning. Here’s that clip:
Just prior to that interview, Trump adviser, 80s relic and Gordon Gekko doll, original, in box, Larry Kudlow, struck a similarly upbeat tone. He also attempted to play down any rift between his main boss (Trump) and his other boss (Lighthizer) following the bizarre exchange in the Oval Office during which the two bickered over the relative merits of MOUs versus “contracts.” Here’s Larry:
Meanwhile, Trump notched a victory at the WTO on Thursday, when the panel ruled that Beijing’s farm subsidies in fact go beyond acceptable limits. Specifically, the WTO’s Dispute Settlement Body said Beijing’s support for wheat and rice producers is in excess of the country’s international commitments.
Lighthizer is pretty excited about that. Here’s a quote from Bob:
This panel report is a significant victory for U.S. agriculture that will help American farmers compete on a more level playing field. We expect China to quickly come into compliance with its WTO obligations.
One wonders what Trump would say if someone were to remind him that this is the same WTO which he has variously insisted treats the US unfairly despite the fact that, according to the Economic Report of the President (which Trump himself signed), the US has won 85.7% of the cases it has initiated before the WTO since 1995, compared with a global average of 84.4 %. By contrast, China’s success rate is just 66.7 percent.
Meddlesome facts again.
You’re reminded that back on June 29, Axios reported that Trump has “repeatedly told top White House officials he wants to withdraw the United States from the WTO.”
“He’s [threatened to withdraw] 100 times. It would totally [screw] us as a country,” one source who’s conferred with Trump on the issue reportedly said, before paraphrasing (maybe) the President as follows:
We always get f*&ked by them [the WTO]. I don’t know why we’re in it. The WTO is designed by the rest of the world to screw the United States.
That caused an uproar last year and heightened concerns that Trump’s palpable disdain for multilateral institutions might manifest itself in the US pulling out altogether via a “plan” called – and I kid you not – the “FART Act”.
Finally, it’s worth noting that the Huawei drama is far from over. On Thursday, the company pleaded not guilty in US District Court in Seattle on fraud, conspiracy and other charges, according to the DoJ. Tomorrow, the world will learn whether Canada intends to officially move ahead with extradition hearings against Meng Wanzhou.
So, take all of this for what it’s worth as you try and discern what’s next in this ongoing soap opera that finds Trump’s “greatest” trade war dragging into a second year despite the best efforts of nearly everyone on the planet to convince him that Peter Navarro, the president’s economic spirit animal, isn’t a credible economist.
somebody landed on Heisenberg Report today by searching for: "is Navarro really Rasputin?"
— Walter White (@heisenbergrpt) February 16, 2019