Commerce Secretary Wilbur Ross says the biggest challenge to reaching a trade deal with China right now is trust. “[China’s] record of living up to things is not superb, so we really need a good enforcement mechanism and that's the hardest thing of all to get,” he told Yahoo Finance on Thursday.
As a full-fledged trade agreement with China has gotten more elusive, President Trump’s administration is lowering expectations for a deal this year. “The most important thing is that we get a proper deal. We're trying to roll back decades of inappropriate trading relationship with China. That's a hard task and it's more important to get it right than it is to get it on Dec. 15 or on any other particular date,” said Ross in an interview in Indianapolis where he was convening the fourth American Workforce Policy Advisory Board meeting.
The president has threatened to impose another round of tariffs on more than $100 billion in Chinese goods on Dec. 15 if the two sides don’t have an agreement by then. But at the same time Trump said this week that he has “no deadline” for a deal to come together: “In some ways I like the idea of waiting until after the election for the China deal,” Trump told reporters in London.
“That's not [a] set-in-cement deadline, but it's a data point – for which they will pay attention,” Ross said.
The Trump administration has set several key conditions for signing a deal with China. “More current trade, reducing our deficit...[and] structural reform,” Ross said. “Respect for intellectual property, no longer forcing technology transfers, no longer subsidizing state-owned enterprises,” said Ross, acknowledging that China would need to pass new legislation to meet Trump’s standards.
CEOs of America’s largest companies have highlighted the impact of Trump’s tariffs on their business. Ross lays the responsibility squarely back on their shoulders. “Remember many, many big American companies are truly multinational. They've already made the decision to move some of their facilities offshore. Mr. and Mrs. America are not international, Mr. and Mrs. America are here. So it's very, very important to us to help Mr. and Mrs. America right here,” he said.
‘In aggregate, economy is booming’
Farmers are the only Americans Ross concedes have faced hardship as a direct result of the trade war with China.
“In the aggregate, it has not been an adverse effect,” he said. “Some individual industries may have had some temporary glitches, like farmers. The retaliations have been very unfairly focused on American farmers. That's why President Trump has released tens of billions of dollars to the farmers to get through this tough period until we can open much better markets for them overseas.”
Despite some “frictional adjustments,” Ross said, “in the aggregate, the economy is booming, people are doing better. We're on the right track.”
The U.S. economy’s growth slowed from 3.1% in the first quarter to 2.1% in the third quarter. “It isn’t so critical, the exact number. What's critical is directional and the direction is clearly a good one. That's why we're working so hard to continue what we've already accomplished since president Trump came in,” said Ross. He pointed to the record low unemployment numbers and consumer strength.
“Reality is the consumer is doing very well both as a recipient of income and as a spender of income,” he said. “You saw the results for Black Friday, [Cyber] Monday – excellent, excellent results. Consumer is around 70% of our economy. As long as consumer spending holds up, our economy will be fine.”
More from Sibile:
States struggling with highest credit card debt? Trump’s South
Here’s how Bloomberg may be saving money by running for president
Why a Trump win would be worse for markets than a Warren win
With USMCA, Dems try to prove they can pass legislation during impeachment
Trump’s claims on income growth challenged by data, ‘wage trap’
Read the latest financial and business news from Yahoo Finance
Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, YouTube, and reddit.