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Shifting Trade Talks With China Head Toward Confrontation

DAVID GREENE, HOST:

So is it hardball for real or just hardball negotiating? President Trump's shifting trade policy with China seemed to turn toward confrontation yesterday. The administration says it is moving forward with punitive tariffs and also limits on Chinese access to American technology. Less than two weeks ago, Treasury Secretary Steven Mnuchin had said that these aggressive moves were on hold. Now talks are set to continue between the two countries in Beijing this weekend. I want to bring in Amy Celico. She is in Beijing. She was senior director for China affairs at the Office of the U.S. Trade Representative under President George W. Bush. And she joins us.

Welcome back to the program.

AMY CELICO: Great to be here, David.

GREENE: So as I mentioned, you're in China. What kind of reaction is this more aggressive message from the White House drawing there?

CELICO: Well, I think it's underscoring that a quick resolution to our trade frictions is certainly not in the cards. Here in Beijing, the Chinese are reacting to yesterday's announcement out of the White House with I think we can say exasperation and mild defiance, in fact - accusing the U.S. of flip flopping, being reckless and still trying to infringe on Chinese core interests that China will not bend on.

GREENE: So Treasury Secretary Mnuchin had said that the trade war was on hold just a couple of weeks ago. What happened?

CELICO: Yes. The Ministry of Commerce is asking the same question because they too said this is unexpected that the White House has flip flopped because it's inconsistent with the agreement that the U.S. and China reached when the vice premier was in Washington just two weeks ago. And I think - what happened? I think that the U.S. side wants to increase its leverage going into this coming weekend's next round of trade talks. Secretary of Commerce Ross is on his way to Beijing later this week.

And I think President Trump probably wants to reiterate that this is not going to be just checkbook diplomacy, buy more goods and we're all going to be fine. I think he continues to stress that we are looking at fundamental imbalances and Chinese industrial policies that are distorting trade rules. The U.S. wants progress on that, too.

GREENE: OK, so if this is largely to just put the United States in the best negotiating position going into these talks, why do you sound so concerned that this relationship is really in trouble broadly going forward?

CELICO: Yeah, I do think it's important to stress that the threats that the administration reiterated yesterday - tariffs, investment, restrictions, export controls - are threats. There are dates for announcements when some of those measures could be in place but no dates for implementation. I think the Trump administration really is still negotiating. However, that said, I am concerned that the U.S. and China both are using national security considerations in economic policymaking and national security is difficult to negotiate away in trade talks.

GREENE: Well, let me ask you about the different aspects of this relationship because the Trump administration could really need China's help if these talks with North Korea go forward. Do trade disagreements jeopardize larger cooperation?

CELICO: Well, the president actually linked North Korea with trade in talking to China a year ago now. And so indeed he, himself, has said that if China helps the United States dealing with North Korea, then we'll go a bit easier with China on trade issues. He seems to have backed off from that. I was surprised too that in advance of potential summit in Singapore on June 12 that the president would reiterate these threats against China on trade issues.

But, in fact, I do think he wants to demonstrate we are not going to just be bought off in these trade talks and that China does have to deal with issues that it considers core interests and does not want to deal with.

GREENE: All right, Amy Celico, she worked on trade policy under President George W. Bush. She now leads the China practice at the Albright Stonebridge Consulting Group. Thanks so much, we always appreciate it.

CELICO: Great being here, David. Thanks. Transcript provided by NPR, Copyright NPR.