Trump administration officials said last year that their end goals in the trade negotiations were “zero tariffs, zero non-tariff barriers, and zero subsidies,” and an end to forced technology transfers.
Now U.S. negotiators may be backing down from their demand for China to pare back its industrial subsidies, according to a Reuters report citing “two sources briefed on discussions.”
Chinese government’s industrial policy. Beijing grants subsidies and tax breaks to state-owned firms and to sectors seen as strategic for long-term development. Chinese President Xi Jinping has strengthened the state’s role in parts of the economy.
In the push to secure a deal in the next month or so, U.S. negotiators have become resigned to securing less than they would like on curbing those subsidies and are focused instead on other areas where they consider demands are more achievable, the sources said.
“If U.S. negotiators define success as changing the way China’s economy operates, that will never happen,” said the other source with knowledge of the trade talks.
“A deal that makes Xi look weak is not a worthwhile deal for Xi. Whatever deal we get, it’s going to be better than what we’ve had, and it’s not going to be sufficient for some people. But that’s politics,” that source said.
China hawks inside and outside of the Trump administration have long warned that China would not easily surrender its policies to subsidize and favor state-controlled business or those selected as “national champions.”
Officials from the Trump administration did not respond to Breitbart News’s request for comment.