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Zhenhua Lu

A former US ambassador to China has said the tariff war had become the “new normal” in the countries’ relationship despite the resumption of trade talks.
Max Baucus, the top US envoy in Beijing from 2014 to 2017, said on the sidelines of a US-China trade relations event in Hong Kong that it would be difficult for the world’s two largest economies to cancel their existing tariffs on each other’s products.
“We have a new normal that the tariffs will continue in the indefinite future,” Baucus, also a former Democratic senator from the agricultural state of Montana, told the South China Morning Post.
“It’s very hard to roll back tariffs once they’re imposed. Both countries’ tariffs that exist today will continue for some time,” he said during the forum, attended by former senior officials including China’s former vice-premier Zeng Peiyan and Japan’s former prime minister Yasuo Fukuda.




The United States and China have imposed tariffs on US$250 billion and US$110 billion of each other’s imports respectively since last July.
Baucus said that the two countries had “strong forces to try to reach, if not an [final] agreement, at least an accommodation, because deep down people know we probably need each other”.
The former US ambassador added that his country’s blacklisting of Chinese telecoms company Huawei remained a theme of the ongoing trade talks. Since the meeting between US President Donald Trump and his Chinese counterpart Xi Jinping during the Group of 20 summit in Osaka last month, Trump has said American companies would be allowed to sell to Huawei, while China would buy more American agricultural products.
Baucus said the deadlock over tariffs and issues such as the dispute over Huawei would be difficult to resolve.


“It will be very difficult for the US to roll back tariffs,” he said. “China will also wait to see if the US actually allows US hi-tech sales to Huawei.
“Consequently, further progress will be difficult. The status quo is likely for the rest of the year.”
Chinese Vice-Premier Liu He and Minister of Commerce Zhong Shan had a telephone conversation on Tuesday with US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin.
White House economic adviser Larry Kudlow said the phone call was constructive, and a face-to-face meeting was discussed, but he called on China to act promptly on its purchases of US agricultural products.
Momentum for the two nations to reach a trade deal had been mounting, but talks were suspended in May after Trump accused China of backtracking on some of its earlier promises.




Since then, Beijing has said it is willing to continue negotiations but would fight the tariff war as long as necessary.
David Lampton, a professor emeritus of China Studies at the Washington-based Johns Hopkins School of Advanced International Studies, who also attended the event in Hong Kong, agreed that the existing tariffs would not easily be removed.
“Trump believes in tariffs,” Lampton said. “Therefore he will be very reluctant to give up tariffs unless he sees a big gain, which he can sell for his [2020 presidential] election.
“I don’t think tariffs is a particularly desirable policy, but on the other side, China has not addressed some legitimate American concerns.”
The US reportedly demanded China make a large number of changes to its domestic laws to protect intellectual property, curb its subsidies to state-owned enterprises and enact a strict enforcement mechanism.


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Diplomacy

Deadlock makes status quo likely for the rest of the year, Max Baucus says
But Beijing and Washington have incentive to strike a deal because they ‘probably need each other’


Deadlock makes status quo likely for the rest of the year, Max Baucus says – but Beijing and Washington have incentive to strike a deal because they ‘probably need each other’.


US-China trade war: All stories

US-China relations

Trade war tariffs are new normal and may be difficult to remove, says former US ambassador to China

Deadlock makes status quo likely for the rest of the year, Max Baucus says But Beijing and Washington have incentive to strike a deal because they ‘probably need each other’

Deadlock makes status quo likely for the rest of the year, Max Baucus says

But Beijing and Washington have incentive to strike a deal because they ‘probably need each other’