Wendy Cutler on the Breakdown of U.S.-China Trade Talks

Trade talks between the U.S. and China have broken down

This photo taken on April 25, 2019 shows workers packaging sheet aluminium at a factory in Huaibei in China's eastern Anhui province. (STR/AFP/Getty Images)

Trade talks between the United States and China concluded on Friday without a deal hours after the Trump administration raised tariffs on $200 billion of Chinese goods. The president, who earlier stressed that talks with the Chinese were "congenial" and was in "absolutely no hurry" to secure a deal, said his administration was prepared to apply tariffs to an additional $325 billion worth of Chinese goods — an indication that trade tensions between the world's two largest economies may intensify in the coming days and weeks.

Asia Society Policy Institute Vice President Wendy Cutler, former acting deputy U.S. trade representative, has commented extensively on the latest round of negotiations between China and the U.S.:

  • In an op-ed published Thursday in the New York Times, she said the biggest obstacles in reaching a deal had less to do with politics than economics:

These are tough matters to resolve, but they are not impossible. For China, the biggest hurdle is political: reaching a deal that satisfies the United States without appearing to cave to American pressure. There is also serious concern in Beijing that China might have problems delivering whatever it agrees to on paper, particularly if it is unable to rein in local governments — a major source of the subsidies and intellectual property practices that the United States wants to stop.

Meanwhile, the United States’ all-or-nothing negotiating tactics could leave China with no choice but to walk away from the table, making the risk of no deal very real. American negotiators should at least identify what trade-offs they are willing to make in order to reach an agreement.

  • Members from the U.S. delegation expressed frustration with the Chinese side for backtracking on parts of the agreement they had previously agreed to. In an appearance on Bloomberg Daybreak: Americas, Cutler said that "at that late stage of the negotiation, that's bad faith."
  • On CNN, Cutler said that she thinks tariffs could be around for a long time and will "hurt both the United States and China."
     
  • In March, Cutler participated in a conversation with economist Arthur Kroeber at Asia Society on the U.S.-China economic relationship. You can watch the complete video here:

About the Author

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Matt Schiavenza is the Assistant Director of Content at Asia Society. His work has appeared at The Atlantic, The Daily Beast, The New Republic, Fortune, and strategy + business among other publications.