WASHINGTON — American and Chinese officials on Monday discussed the status of the trade deal both nations signed in January, a pact that continues to open up some commerce between the world’s largest economies even as the bilateral relationship deteriorates in other areas.
Robert E. Lighthizer, the United States trade representative, and Steven Mnuchin, the Treasury secretary, spoke with Liu He, the Chinese vice premier, as part of a six-month checkup on the trade agreement both countries spent the last several years negotiating.
The call is significant in part because it comes as President Trump and other administration officials continue to blame China for not doing enough to contain the coronavirus. Mr. Trump has said the United States should punish Beijing for not keeping the disease from becoming a pandemic, prompting questions about his commitment to remaining in the trade pact.
In a statement issued after the meeting, the Office of the United States Trade Representative said that the parties discussed steps China had taken to “ensure greater protection for intellectual property rights, remove impediments to American companies in the areas of financial services and agriculture, and eliminate forced technology transfer.”
Both nations discussed China’s recent increase in purchases of American products, as well as future actions needed to enact the agreement, the statement said. “Both sides see progress and are committed to taking the steps necessary to ensure the success of the agreement,” it read.
China’s commerce ministry issued a fairly upbeat statement as well. “The two sides had a constructive dialogue on strengthening the coordination of the macroeconomic policies of the two countries and the implementation of the first phase of the China-U.S. economic and trade agreement,” the statement said. “Both sides agreed to create conditions and atmosphere” to carry out the deal, the statement added.
“The fact that the conversation happened is positive, showing that trade is still moving ahead despite the current tensions between the two countries,” said He Weiwen, a former Ministry of Commerce official who still plays an active role in Chinese advisory councils on trade.
Since signing the deal, China has taken steps to open its markets to American banks and farmers, but its purchases of American products are far behind its promise to buy an additional $200 billion by the end of next year. Through June, China had purchased only 46 percent of the products it would need to buy by this point of the year to meet the full-year target, or a total of $40.2 billion, according to tracking by the Peterson Institute for International Economics.
Many trade experts called the purchasing goals unrealistic, even before the pandemic. But the administration’s supporters say the purchases will most likely increase toward the end of the year, when harvest season arrives for key American crops like soybeans. China has already sharply increased its purchases of American corn and soybeans this summer.
Mr. Trump has said repeatedly that he will take action if China fails to follow through on its commitments. Those threats have become more pronounced during the pandemic. Speaking to reporters on Aug. 14, Mr. Trump said, “We’re doing very well on our trade deal but I feel differently about China than I’ve ever felt.”
At least for now, the trade deal has emerged as a surprising source of stability in a relationship that is increasingly troubled on other fronts.
In just the last few weeks, the Trump administration has moved to bar the Chinese-owned social media apps TikTok and WeChat from the United States, drawing a lawsuit on Monday by TikTok accusing the U.S. government of depriving it of due process. The administration has also shut down a Chinese diplomatic mission in Houston, warned of a threat from China’s Confucius Institutes, and placed sanctions on Chinese officials and entities over human rights violations, among several other measures.
The moves have come in response to newly perceived security threats, but also the president’s desire to appear tough on China as the November election approaches.
Given the charged environment between the United States and China, “we need some good news,” said Myron Brilliant, the executive vice president of the U.S. Chamber of Commerce. He said that the business community hoped the deal would pave the way for greater market reforms in China over time.
“We know that there is a lot of work ahead, but we continue to focus on the need for pragmatic engagement between the United States and China,” he said.
Mr. Trump has been visibly frustrated with China, which he blamed for spawning a pandemic and diminishing his re-election chances. But the president appears to have little to gain politically from scrapping his own trade deal, the first such agreement the United States has signed with China, but one that came at a significant cost to the American economy.
“Somewhat ironically, the economic relationship has become the bright spot in an otherwise deteriorating relationship,” said Kelly Ann Shaw, a partner at Hogan Lovells and a former trade official for the Trump administration. Amid the current recession and pandemic, she said, “it would be foolhardy to rip it up on either end.”
Wendy Cutler, a former trade negotiator and the vice president of the Asia Society Policy Institute, said that the agreement would allow officials in China to focus on its economic recovery without having to worry about more tariffs, and help American officials keep farmers happy before the election.
“At least for now, both sides share an interest in making the agreement work, although the naysayers in both capitals are gaining ground,” Ms. Cutler said.
Ms. Cutler said before the meeting that she expected the Chinese side to express displeasure over Mr. Trump’s actions against WeChat and TikTok, while also pointing to record agricultural purchases they made this summer as evidence of their commitment to the trade deal.
Gao Feng, the spokesman for China’s Ministry of Commerce, said at the ministry’s weekly news conference in Beijing on Aug. 20 that the United States now tends to “impose transaction bans on Chinese companies on unwarranted charges, which has no factual or legal basis, seriously damaging the legitimate rights and interests of enterprises and seriously violating the basic principles of the market economy.”
Asked earlier this month about the imminent half-year review of the phase 1 trade agreement, Zhao Lijian, a Chinese foreign ministry spokesman, said that China had “conscientiously implemented the agreement.” He added that the coronavirus epidemic and the tightening of American export controls had undoubtedly had an impact on some imports.
“Under the current situation, it is necessary for both parties to work together to strengthen cooperation and overcome difficulties together,” Mr. Zhao said. “China hopes that the United States will stop restrictive measures and discriminatory practices against Chinese companies and create conditions for the implementation of the first phase of economic and trade agreements.”
Ana Swanson reported from Washington and Keith Bradsher from Shanghai. Albee Zhang and Amber Wang contributed research from Beijing. Jeanna Smialek contributed reporting from Washington.
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