No China Trade Deal Expected This Week, Pelosi Says USTR Told Her

House Speaker Nancy Pelosi said she was told by the administration that no trade deal with China will be reached this week, potentially paving the way for President Donald Trump to increase tariffs by May 10. Pelosi, interviewed May 8 during a Washington Post Live webcast, said she was told by U.S. Trade Representative Robert Lighthizer on May 6 that China planned to “take a walk” from any agreement proposed this week. A rejected deal from China could result in increased tariffs on Chinese goods; the tariffs already are set to rise from 10 percent to 25 percent on May 10 (see 1905050001). When asked if she is confident there is any way a deal could get done this week, Pelosi said no. “Let me just say that, first of all, I never believed the Chinese were going to honor what they said they were going to do,” she said.

Pelosi said she agrees with Trump’s stance on China but criticized his deal-making methods. She said Trump’s decision to place tariffs on the European Union as well as China damaged any leverage the U.S. might have had and weakened its position. Pelosi said the U.S. should be working with the EU to curtail unfair Chinese trading practices. “But instead the president put tariffs on the EU and made them unhappy with us,” she said. “And the Chinese were laughing all the way to the bank.”

Pelosi said the most important aspect of the deal is enforcement, which she said it currently lacks. “In any trade agreement, if you don't have enforcement, all you're having is a conversation and a cup of tea,” Pelosi said. When asked if Trump will follow through on his threat of tariffs by the end of the week, Pelosi said “we’ll see. You just have to take it one day at a time.”

Meanwhile, House Ways and Means Trade Subcommittee Chairman Earl Blumenauer, D-Ore., sounded pessimistic about the U.S.-China trade talks recovering from the setback this week. Blumenauer, who talked about the role of Congress in trade at the Center for Strategic and International Studies May 8, said, "I don't think [Chinese officials] are going to be cowed by the United States. They're not going to want to look weak. They have their own internal pressures."

He criticized both the style and the substance of Trump's approach. "I'm just appalled that it seems so scattershot, trade policy by tweet," he said. And not only did the U.S. miss an opportunity to unite with allies to confront China, Blumenauer suggested that the U.S. has other tools besides tariffs to pressure China to change its practices. He gave an example of blocking Chinese firms from infrastructure procurement. He asked why we allowed Chinese steel, what he called "an inferior product," to be used on the Bay Bridge.

Blumenauer said the issues are real, pointing to the steel overcapacity that comes from "the corrosive impact of state-owned enterprises," and violations of intellectual property. But, he said, "The concept that tariffs affect other people and not American consumers and business is just plain wrong," he said. "People are perhaps willing to give him the benefit of the doubt in Trump Country, but patience is wearing thin."