US trade chief sees long-term China challenges, continued tariff threat

Lighthizer defends Trump administration's use of tariffs

WASHINGTON: The United States will need to maintain the threat of imposing tariffs on Chinese goods for years even if Washington and Beijing strike a deal to end a costly trade war, US Trade Representative Robert Lighthizer told lawmakers on Wednesday.

The United States and China still have hard work ahead to secure a pact not only to end the dispute, but to ensure any agreements are met, the top US trade negotiator told the House Ways and Means Committee at a hearing on US-China issues.

In his first public comments since President Donald Trump delayed a deadline to more than double tariffs on $200 billion in Chinese goods, Lighthizer detailed a long road ahead to overhaul trade dealings between the world's two biggest economies.



"The reality is this is a challenge that will go on for a long, long time," Lighthizer said. He earlier said he "is not foolish enough" to believe that a single negotiation will change the increasingly sour bilateral trade relationship.

Lighthizer defended the Trump administration's use of tariffs, saying they are the only tool to push China to make the major structural changes that he, Trump and many of the lawmakers themselves are seeking. "If there is disagreement at my level, the US would expect to act proportionately but unilaterally."

The continued threat of tariffs would be disappointing news for industry and investors exposed to China and hoping for an end to the uncertainty and disruption caused by the trade war.

Lighthizer's words appeared to curb market hopes a deal is imminent, with major US stock indices dipping into negative territory.

Global equity markets rose after Trump earlier this week delayed the March 1 deadline to raise tariffs to 25% from 10% and said he may soon meet with China's President Xi Jinping to finalise a deal.

Lighthizer's comments that a deal is not imminent were "enough to cause the markets to sell off," said Michael Antonelli, Managing Director at Robert W Baird in Milwaukee.

 

Most severe challenge

The issues that the US faces with China are "too serious" to be resolved by promises to purchase more US goods and structural change by China is needed, said Lighthizer, describing a long-term effort for securing the key changes the US is seeking from China.



China has offered to purchase an additional $1.2 trillion of US products over six years, people familiar with the talks have said, which would be welcome relief to farmers and businesses hit hard by Beijing's retaliatory tariffs.

But lawmakers have urged the Trump administration not to allow potential big-ticket purchases to distract him from pursuing an end to what the US alleges are unfair trade practices.