Leverage in China’s Trade Position

Before every major visit of Chinese officials to the United States, the Chinese hold separate meetings with business friends to discuss matters of mutual interest.  So, Liu He visited yesterday with James Dimon and David Solomon, two of the biggest financial sector leaders, and a number of others who willing to listen.  He is there to talk about opening market channels for businesses in China, knowing full well that aluminum and steel tariffs are likely to be coming.  The President is meeting with Aluminum and Steel manufacturing leaders while his Treasury Secretary and Trade Representative meet with the Chinese leader.  As I said yesterday, this has been a long time coming because the trade in Chinese metals has been recognized as a problem since 2015.

These little side meetings before visiting the White House are not very subtle reminders to US businesses that they depend on China for some of their revenue.  Having a “trade war” however unlikely that is, is not a good thing.  U.S. businesses will suffer from that kind of action, just as they might gain from opening up more avenues for trade in China.  That has been promised often, but little has happened.

These are pretty smart business people in all of the groups getting together.  They know China has done little to open up its trade, continues to finance its State owned enterprises, steals our technology and uses it to compete in world markets.  That does not stop the back-door attempts to get our own corporate leaders to do their influencing for them. They don’t go to just anybody;  they want people who will favor their positions on trade, and talk to the White House about doing the same.  The difference in this White House is a focus on the numbers i.e. they keep trade numbers and follow what the Chinese have really done, not just what they have promised.  We know they are big on promises but do little after.  It is the same slight of hand that allows them to vote for UN sanctions on Iran and North Korea, but violate them at every turn.  Those promises are no longer credible.