Businesses Hail, Some Politicians Scorn, US-China G-20 Detente

The trade group that represents companies that invest in China said it is glad China and the U.S. will "postpone further escalation of their tariff battles." The U.S. Chamber of Commerce also welcomed the news, and added, "We hope each side is now prepared to go the last mile to achieve a high-standard, comprehensive, enforceable agreement. China must commit to addressing longstanding unfair trade practices and industrial policies that prevent a level-playing field for U.S. companies. Opening markets, increasing IPR protection, and promoting fair and reciprocal opportunities in trade are in China’s own interest as it works to build a stronger and more innovative economy."

The National Retail Federation looked ahead with hope that the current tariffs will be removed. NRF Senior Vice President for Government Relations David French said: “Pulling back from the brink of further tariff escalation is a good sign for retailers and their customers, and we look forward to continued progress in the talks with China so that further tariffs can be avoided and existing ones lifted.”

That optimism might be unwarranted, one trade lawyer is advising. The “good news” in the weekend’s developments “is that the two sides will resume negotiations,” blogged customs expert Ted Murphy with Baker & McKenzie. “The bad news is that meaningful differences remain and negotiations to resolve these issues will not be quick or easy.” Murphy is counseling companies to plan for the threat of additional tariffs “remaining in place for the foreseeable future.” He said that “[c]ompanies impacted by List 4 should be taking advantage of this delay in the imposition of additional duties to further alternative sourcing plans.”

National Association of Manufacturers CEO Jay Timmons said, "A trade deal, not a trade war, is exactly what manufacturers have advocated over the last year and a half, and today’s meeting brings us closer to that goal." Timmons also said manufacturers have paid the price while China has stolen intellectual property and engaged in unfair trade practices, and they want a level playing field.

But China hawks in the Senate expressed dismay on June 29 that the export ban to Huawei would be softened, and said that kind of action makes a level playing field less likely. According to Fox Business's citing of unnamed sources in the administration, a general license will be offered to companies.

“Huawei is one of few potent levers we have to make China play fair on trade. If President Trump backs off, as it appears he is doing, it will dramatically undercut our ability to change China’s unfair trade practices," said Senate Minority Leader Chuck Schumer, D-N.Y.

Sen. Marco Rubio, R-Fla., tweeted, "If President Trump has in fact bargained away the recent restrictions on #Huawei, then we will have to get those restrictions put back in place through legislation. And it will pass with a large veto proof majority."

The American Enterprise Institute's Derek Scissors, a China expert, blogged that the administration's broadly applied tariffs don't motivate Chinese technology firms to stop stealing intellectual property from U.S. companies. "Huawei fits this pattern perfectly. The initial action was not a blanket denial order but addition to a list which allows sales to Huawei from third countries. A temporary license was granted until August, supposedly to allow time to adjust but actually to buy time for talks. President Trump then repeatedly said Huawei was negotiable. There was no change at Osaka -- Huawei has been discussed as a genuine threat but never treated like one."