In a surprising show of public dissent within Beijing’s power echelons, China’s former top trade negotiator slammed Beijing’s trade war tactics on Sunday, singling out the decision to impose tariffs on soybeans as ill-thought out. The comments by Long Yongtu – a former vice-minister with China’s foreign trade ministry who led the talks that led to China’s entry to the World Trade Organisation – and first delivered by the South China Morning Post, offered a rare glimpse of the country’s internal divisions on how to handle the dispute with the United States. He told the annual conference organized by China’s Caixin media group that it was inappropriate to involve political considerations in trade talks.
“If we have people who always talk about politics engaging in [trade] negotiations, we will never have a deal,” Long said, without naming anyone directly. “We don’t think deeply enough.”
Specifically, Long said it was unwise to impose import duties on soybeans in retaliation for US President Donald Trump’s decision to slap additional levies on Chinese imports, explaining that “agricultural products are very sensitive [in trade], and soybeans are very sensitive as well … We should have avoided targeting agricultural products because targeting agricultural products should be the last resort,” Long said. “But we have targeted agricultural products, or soybeans, right from the start.”
The agricultural states that produce the bulk of America’s soybeans make up Trump’s political heartland, but Long pointed out: “China is in dire need of soybean imports, so why did we pick out soybeans from the beginning? Is this deep thinking?”
China had imposed a 25% import duty on soybeans in the first round of the tariff battle with the US. And while this greatly reduced US exports to the world’s biggest soybean importer, it has also led to sharp price increases in China.
As a reminder, Beijing picked soybeans as one of the first US products to sanction partly because it was trying to inflict pain in the Republican Party’s heartland, however to Long this approach merely solidified Trump’s resolve to punish China and perpetuated the trade war. Others disagreed: Lou Jiwei, China’s former finance minister and now the chairman of the national pension fund, said in March that Beijing could inflict pain on the US economy by “hitting” sectors such as soybeans, cars and aeroplanes.
For now, the former top trade negotiator has been proven right.
Long’s rare public criticism came as negotiation teams from the two countries prepare for a fresh round of talks, whose prospects however are dimming with each passing day, and certainly after this weekend’s APEC summit fiasco in which VP Pence and president Xi exhanged sharp verbal blows indicating that neither country is willing to compromise.
Still, Long said he was “cautiously optimistic” about the prospects of solving the dispute because Trump’s tariffs have also hurt US interests.
“To some extent, I like Trump’s character,” Long said. “I hope the trade talks can have a good result.”
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