A woman passes by a ZTE building in Beijing, China, on May 8, 2018. President Donald Trump tweeted Sunday that he intends to help ZTE “get back into business,” after the company was sanctioned for trade violations. (Ng Han Guan/AP)
Wendy Cutler was the deputy U.S. trade representative during the Obama administration and negotiated the Trans-Pacific Partnership trade agreement. She is now the vice president and managing director of the Asia Society Policy Institute in Washington, D.C.
US-China trade tensions will continue to simmer this week. Despite a potential olive branch from the administration around the future business operations of the Chinese telecommunications company ZTE, the United States is forging ahead with plans to impose tariff increases on certain imports from China. Meanwhile, Liu He, China’s lead economic negotiator, is visiting Washington this week to continue discussions with his U.S. counterparts.
Will we end up in a retaliation cycle with China, or is a negotiated solution still possible? The recent U.S. proposal submitted to China underscores the scope and seriousness of the trade, investment and technology issues on the table. Unfortunately, it does not signal to China where U.S. priorities lie, resembling more of a wish list than a serious negotiating proposal.
Reports suggest that both sides may be focusing their talks on bilateral deficit reduction by identifying sectors and products where China can purchase more from the United States. If this is indeed the major outcome of the talks, it would be a serious lost opportunity. After taking the United States to the brink of a trade war, the Trump administration should seek a long-term solution to our differences with China, not a short-term win.
The administration can do this by focusing on setting the rules of the game for the high-tech sectors over which American and Chinese companies will soon compete. This includes an agreement to end forced technology transfer practices, strengthen and enforce intellectual property rights, and open the Chinese market to U.S. goods, services and investment in these sectors.
Central to a long-term solution is an understanding of how Beijing’s “Made in China 2025” plan should operate. In an effort to move up the manufacturing value chain, China is pumping hundreds of billions of dollars into 10 advanced technology sectors, from new energy vehicles to aerospace, artificial intelligence and high-end robotics.
Insisting that China dismantle its Made in China 2025 plan is not a productive use