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Jeff Sessions on China: Enough is enough

US Attorney General Jeff Sessions is stepping up efforts to target China over economic espionage, simultaneously announcing a new initiative to combat trade theft.

Posted: Nov 2, 2018 5:26 PM
Updated: Nov 2, 2018 6:00 PM

President Donald Trump says his trade negotiations with China are going swimmingly, but his chief economic adviser says they're nowhere close to a deal.

Over the past 24 hours, the White House has sent a flurry of mixed messages about the status of trade talks with Beijing amid an ongoing tit-for-tat that started with Trump's decision to tax billions of dollars worth of Chinese imports.

Trump has teased a victory in the trade war ahead of next week's crucial midterm elections, claiming that Chinese President Xi Jinping is eager to make a deal at their expected meeting on the sidelines of the G20 summit of global leaders in Argentina later this month.

"We've had very good discussions with China. We are much closer to doing something. They want to make a deal," Trump said Friday outside the White House.

A Bloomberg report overnight that the administration was already drafting terms sent global stocks higher early Friday -- but then National Economic Council director Larry Kudlow went on television to knock it down, telling CNBC "there's no massive movement to deal with China."

The US administration has offered to host a dinner in Argentina with Xi, US officials told CNN this week. But they also said a trade deal with China is still far off and that existing administration tensions over China have not eased. They are not at a place yet to start formally drafting a trade deal.

The administration has taken a tough stance with China over the past two months. Trump escalated the trade war in September by slapping tariffs on $200 billion of Chinese goods, on top of an earlier $50 billion round. The move drew complaints from US importers who will have to pay more for consumer goods ranging from luggage to hats to spices. The administration has also this week targeted Chinese companies over attempts to steal trade secrets.

As recently as Monday, Trump has suggested China wasn't ready to come to an agreement. "I'd like to make a deal right now, I just say they're not ready," he told Fox News.

But after the President spoke with Xi by phone on Thursday, he tweeted that "discussions are moving along nicely" -- and said meetings are already being planned for the G20. The Chinese Ministry of Foreign Affairs echoed his positive tone in a Friday briefing with reporters.

Here's a quick time line of what the President and senior officials have said:

  • Thursday morning: Trump says on Twitter that he just had a "long and very good conversation" with Xi and that "discussions are moving along nicely."
  • Midday Thursday: Kudlow tells reporters in the White House driveway that there may be a "thaw" between the United States and China on trade. But he also dinged Beijing, crowing that the US economy is doing better than the rival superpower's: "From our view, we're booming. China's not."
  • Later Thursday afternoon: Attorney General Jeff Sessions announces charges against a Chinese company for stealing trade secrets, as well as a new initiative to combat economic espionage.
  • Thursday night: At a rally in Missouri, Trump remains optimistic, saying that the Chinese "want to make a deal." "Lots of great things are going to happen over the next short period of time," he said. "It's going to work out good."
  • Overnight: Bloomberg news reports that Trump has asked key US officials to begin drafting potential terms of a deal. The report sends stocks higher.
  • Friday morning: A White House official walks back the Bloomberg report, telling CNBC that there is a long way to go before reaching an agreement. US stocks turned negative.
  • Friday afternoon: Kudlow, speaking on CNBC, says the administration is doing "normal, routine preparation for the upcoming meeting between Trump and Xi. "We are not on the cusp of a deal," he said, but did note there were "good vibes" from the phone call on Thursday.
  • Later Friday afternoon: Trump reiterated how well he thought his recent conversation with Xi went. "A lot of progress has been made," he told reporters outside the White House.

The Trump administration wants the Chinese to address what it says are unfair trade practices, including intellectual property theft. Trump also argues that the trade imbalance between the two countries hurts the United States.

Many American manufacturers, farmers and lawmakers from both sides of the aisle say they appreciate the administration's efforts to change China's trade policies. But some argue the tariffs are not the best way to address the issues. Tariffs pose a dilemma to US importers who must decide whether to absorb the higher cost of the goods, or pass it on to consumers and some exporters are hurting from China's retaliatory tariffs.

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