Lighthizer, Mnuchin, Liu to Restart Face-to-Face Negotiations July 30-31 in Shanghai

From Ryan Ong, Director International Business Policy, NAM

The White House confirmed what had been rumored for more than a week: that US senior trade negotiators, US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, travel to China this week for the first round of face-to-face trade negotiations with their Chinese counterpart (Vice Premier Liu He) since President Donald Trump and President Xi Jinping agreed in late June to get back to the negotiating table.

According to reports from both sides, Lighthizer and Mnuchin will depart Washington on Monday, July 29 for two-day talks in Shanghai (July 30-31). The choice of Shanghai (as both China’s largest commercial center and the site of a key US-China diplomatic document following President Richard Nixon’s first trip to China in 1972) as a negotiating location could be a signal to lower the political pressure on negotiations and focus on the trading concerns.

  • This announcement follows a pair of phone calls between lead negotiators, as well as de-escalatory actions by both sides in recent weeks. USTR on July 9 announcing exemptions for 110 categories of products imported from China, while China announcing both a major purchase of sorghum and signaling quiet assent for Chinese company purchases of additional agriculture products without paying China’s retaliatory tariffs.
  • The White House statement laid out the full range of outstanding issues in the talks (“intellectual property, forced technology transfer, non-tariff barriers, agriculture, services, the trade deficit, and enforcement”), aligning with the three buckets of priority asks previously raised by the United States (increased purchases of US products; structural reforms on issues such as IP and technology transfer; and enforcement mechanisms).
  • However, the starting point for negotiations remains unclear: in the run-up to the talks, there have been no clear signals that the two sides had mutually agreed on the starting text, moderating expectations for this round of negotiations.

In the background for these negotiations, both countries hold outstanding points of leverage, with the United States currently pausing implementation of tariffs on List 4 and China holding on potential actions related to rare earth export restrictions and a potential “unreliable entity” list of foreign companies.

Additionally, Huawei – and the implementation and impact of Huawei restrictions for national security and economic interest – continues to shape these bilateral discussions.

Tariff Exclusions: USTR Grants New Batch of List 1 Exclusions; Creates New Tracking Site for List 3 Exclusions – But Questions about Exclusion Renewals?

On July 9, USTR announced a sixth series of product exclusions granted for products under List 1, covering 110 specific product descriptions (certain types of pumps and pump parts, arc welders, forklift trucks, AC motors and generators, electric shredders and parts used in escalators and elevators). As with previous announcement, product exclusions will be valid for one year. According to follow-up Customs and Border Protection guidance, those seeking to use the exemption should report both their normal Customs classification as well as specific category 9903.88.11.

In addition, USTR also has set up a new tracking site to monitor List 3 exclusions. To date, USTR has received and posted more than 900 exclusion applications since that process opened on June 30; List 3 exclusion applications will be accepted through September 30.

NOTE:  AWPA is tracking the exclusion requests for wire products which are on List 3. Updated daily, the Wire Products exclusion requests can be found on the AWPA Website. You must respond to exclusion requests within 14 days after the request has been posted.