A U.S.-China Trade Deal Must Do More Than Roll Back Tariffs

Wendy Cutler on CNBC Squawk Box

ASPI Vice President Wendy Cutler joined CNBC’s Squawk Box to discuss the latest round of U.S.-China trade talks, including President Trump's highly anticipated meeting with Vice Premier Liu He.

Cutler says the key for talks will be whether a possible deal covers issues at the heart of the conflict, such as intellectual property rights and forced technology transfer. “If it’s just rolling back tariffs, Huawei licenses, and agriculture purchases, that’s not really moving the ball forward,” Cutler says. A broader deal covering such issues remains plausible, however, as Cutler notes that, “up until last May, both sides seemed to be making progress on these issues,” and it will be important whether aspects of these issues will be in any “mini-deal” struck this week.

Cutler points to the pain from the current tariffs felt by China and the desire for relief as a major motivator for Chinese leaders to reach a partial deal. However, Cutler worries that if an interim deal is reached, China will “wash their hands of this” and further progress on core issues will stall. Key to this question will be whether a deal rolls back tariffs implemented in September, or whether it only delays or cancels planned tariff increases scheduled for mid-October and mid-December. Cutler also notes the difficulty for businesses, which face questions about how to navigate political issues in accessing China’s huge market, as was seen with the tensions between China and the NBA in recent weeks.

Watch the full interview on CNBC.