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There's A Truce In The U.S.-China Trade War. What's Been Achieved?

STEVE INSKEEP, HOST:

President Trump backed away from his latest threat against China. After dinner with China's leader, the president says he will not increase tariffs on $200 billion worth of Chinese goods. Ten percent tariffs that he imposed will stay. An increase to 25 percent will not take effect for now. In exchange, China says it will buy a lot of American goods.

Erin Ennis will discuss this with us. She is senior vice president of the U.S.-China Business Council, an organization of companies that do business with China. She's in the studios.

Good morning.

ERIN ENNIS: Good morning.

INSKEEP: What do you make of this announcement?

ENNIS: Well, it certainly is progress, considering what the alternative was. We all had been anticipating that that 25 percent increase on January 1 would be put into place, so halting it for 90 days is a good start. But 90 days isn't that long, and so we certainly are going to be looking for what kind of progress might be made in that period. And hopefully, that means that we would then see a pathway to reduce the tariffs that remain in place as well.

INSKEEP: We also haven't been told exactly what China is supposed to buy in exchange for the president backing off. Do you have any idea?

ENNIS: We have not seen any specifics. I guess I would just note that the tariffs themselves, actually, weren't tied to any concerns about how much China buys from the United States. The tariffs are tied to concerns about intellectual property rights protection and technology transfer policies. And so until those issues get addressed, it's difficult to see what the pathway is to reducing the tariffs. And of course, China also has retaliatory tariffs on many of the products that it's about to buy. We don't know if China is reducing those tariffs as well.

INSKEEP: Well, that's an interesting point. You are observing that the fundamental problem the United States has with China is the way China does business, things like intellectual property rights and technology transfers that are forced and that sort of thing. There's no agreement to deal with any of that yet.

ENNIS: There's an agreement to talk about those issues. And that, again, is progress. And it's something that the business community has been calling for since the beginning of these discussions. There's no disagreement that China is a very challenging place to do business. In addition to intellectual property rights issues and technology transfer concerns, there's market access restrictions that are at the core of how many companies can even enter the market to begin doing business there. So those things are the issues that the business community has been in agreement, need to be addressed. We've had concerns about the use of tariffs to try to get progress on those issues. But having both countries sit down at the table and talk about those substantive issues and make progress on them, that's what we've all been looking for.

INSKEEP: OK. So it's good that they're going to talk some more. In the meantime, China basically offers a payoff. We don't exactly know what the payoff is. China says, we're going to buy something. And in return, China continues to get not quite such restricted access to U.S. markets.

I want to ask about the broader approach here. You say you agree with the president, there's a problem here. People in the business community agree there's a problem with China. The way the president has approached trade issues - he did this with NAFTA; now he's done it with China - he makes a big threat. I'm going to destroy NAFTA. But then he ends up adjusting NAFTA or getting a new NAFTA that's got a lot of the same features. Now, here, he makes a big threat on tariffs, ends up backing off at least for now. Is this good for business?

ENNIS: Well, much like nature abhors a vacuum, business abhors uncertainty. So no, we don't feel this is actually the right way to be doing these kinds of things. I will note, the president has not backed off of tariffs. What he's backed off of is an increase in tariffs.

INSKEEP: There's still a 10 percent tariff.

ENNIS: We've got tariffs on about $267 billion worth of goods already between the tariffs related to steel and aluminum and to these issues on technology transfer and IP. So the president has not reduced tariffs in any way. There is still uncertainty. Ninety days is a - you know, three months - really short time to address issues that have been longstanding in the relationship. So I would say, we don't know yet whether the president has a plan that will reduce those tariffs and what that will mean.

INSKEEP: Ms. Ennis, thanks for coming by. Really appreciate it.

ENNIS: Thank you.

INSKEEP: Erin Ennis is senior vice president of the U.S.-China Business Council. Transcript provided by NPR, Copyright NPR.