US has less leverage with China on tariffs than it expects, says business advocate

The president of a business advocacy group representing more than 270 American companies in China warned on Thursday that Washington may have less leverage in tariff negotiations with Beijing than it thinks.

There was a perception in the United States that “somehow China’s economy is so weak that the tariffs will bring China to its knees,” said Sean Stein, president of the US-China Business Council, at an event hosted by the US–China Education Trust on Thursday.

In fact, Beijing had “been predicting this day and preparing for this day since at least mid-2018”, he continued, noting that China did not see the need for a deal as urgently as the White House might believe.

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‘Fake news’: Chinese officials dismiss claims of US trade war consultations

Stein’s comments come a day after US President Donald Trump said he was considering slashing the hefty tariffs Washington had imposed on China since his return to the office in January, and that the two sides were actively discussing the issue.

The two countries appear deadlocked, with China denying on Thursday that it had made any overtures to the US on trade negotiations and dismissing claims of progress on bilateral talks as “fake news”.

Another common US misjudgment, Stein told the Washington event, was underestimating China’s desire to not “be perceived as being bullied on the world stage”.

According to Stein, what set off the escalatory spiral, which culminated in both countries levying triple-digit tariffs on the other, was Washington’s expectation that Beijing would initiate contact, as other countries had done, after the first round of tariffs imposed on China during Trump’s second administration in February.

Moreover, while the US might see its tariff policy narrowly, Beijing viewed it as part of a “broader US strategy to contain China’s growth”, Stein said, noting it as another reason a quick deal between the two countries was unlikely.

South China Morning Post