US Treasury Secretary Steven Mnuchin over the weekend said Chinese and US negotiators reached a framework agreement meant to reduce Washington's massive trade imbalance with China.
The long-run picture may not be so sunny. "The deal does nothing to reduce the U.S. trade deficit, grow American jobs, or boost domestic manufacturing".
As part of the deal, China reportedly offered to remove tariffs that impact billions of dollars in US farm products, though one of the WSJ's sources said "the White House was meticulous in affirming that the case is a law enforcement matter and not a bargaining chip in negotiations".
Some in USA business groups who had been pushing for tougher measures to pressure China to ease long-standing market barriers on US companies expressed disappointment.
ZTE has been forced to halt major operations after the USA slapped a ban on China's second-largest maker of phone networking equipment for violating a settlement on breaching sanctions and then lying about it. The president said "too many jobs in China" had been lost, marking an about-face in his criticism of China's trade practices.
"The president and Secretary Mnuchin, what they are doing sends a unsafe signal to businesses around the world that the United States is willing to forgive sanction violations or reduce penalties", Schumer said.
The celebration could prove premature.
Kudlow, speaking on CNBC, said that China appeared amenable to opening its market to US financial companies and said he was optimistic that China would allow foreign companies to have majority stakes in their business operations there. That helped ease investor concerns the two biggest economies might be headed for a trade war. The U.S. ran a deficit with China in goods and services past year of $337 billion. -China Business Council, called the apparent de-escalation in trade tensions "a great bit of progress".
"What's different is the way it's all been done in public, on Twitter", she said.
Larry Kudlow, Trump's top economic adviser, said on Sunday that management changes at ZTE would be among remedies needed before the US would consider a reprieve. Real structural change is necessary.
White House chief economic adviser Larry Kudlow speaks during a television interview outside the West Wing of the White House, in Washington, Friday, May 18, 2018.
Commerce Secretary Wilbur Ross, who has been part of the USA negotiating team, is expected to go to China soon to follow up on last week's discussions.
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They have the numbers to block the wall funding - or to demand concessions from Trump and Republicans in return. Trump has previously referred to unauthorized immigrants involved in gang activities as " animals ".
The Dow Jones Industrial index moved higher in afternoon trade Monday, adding 314 points to trade above 25,000 for the first time since March.
The president also warned China that it needs to be "strong and tight" on the border of North Korea while negotiations are in progress. In exchange, the USA would drop the ban.
"The Trump administration seems eager to engineer at minimum a temporary peace with China to ensure a smooth run-up to the Kim-Trump summit in June", Cornell University economist Eswar Prasad said, referring to the June 12 meeting scheduled between President Donald Trump and North Korean leader Kim Jong Un.
Trade negotiations will continue, with a U.S. delegation to visit Beijing to work out details for the expansion of USA exports under the terms of an agreement struck at high-level talks between the two sides in Washington at the end of last week. After China responded with its own tariffs on US agriculture, Trump threatened to impose duties on an additional $100 billion of Chinese goods, a move that hit global stock markets hard due to fears of rising protectionism.
"Energy exports to China are already soaring", Derek Scissors of the conservative American Enterprise Institute wrote in a blog post.
If there is success in the U.S.
The "structural changes" demanded by Lighthizer and others were set out in the U.S. document issued to China during talks in Beijing at the beginning this month.
Washington had threatened to impose tariffs on $50 billion of Chinese imports unless Beijing rectified its theft of USA intellectual property. Trump later ordered Lighthizer to seek up to an additional $100 billion in Chinese products to tax. China responded by targeting $50 billion in USA products, including soybeans - a direct shot at Trump supporters in America's heartland. So some business groups were relieved by the cease-fire.
They amounted to nothing short of a demand that China cease striving to make technological advances under its "Made in China 2015" plan, end state financial support for technological innovation, and agree to all restrictions imposed on it by the U.S. without taking any retaliatory action-including even a reference of disputes to the World Trade Organisation.
The United States and China are said to be working on a deal that would keep ZTE from going out of business. In particular, the statement the two sides issued skirted over the key issue of forced technology transfers from the United States to China.
"I can assure you this president is very focused on protecting American technology", said Mnuchin. "They care about one thing, and that's Made in China 2025". "America is becoming a natural resource and tourism exporter to China, putting us in the economic position of a third world colony".