The leader of the largest US business lobby group has cast doubt over the prospects of the US and China reaching an interim pact to halt their trade war, after he met Robert Lighthizer, Donald Trump’s chief negotiator in the talks with Beijing. 

Tom Donohue, the president of the US Chamber of Commerce, said he had detected a desire for de-escalation both in Washington and Beijing, with “people in both places thinking ‘let’s calm down, let’s start making positive statements’”. But he said he did not see any ironclad, formal truce emerging in the near term. 

“I don’t think there will be an agreement of any type until it’s a matter of substance,” Mr Donohue told reporters at a press conference on Monday. “I don’t think they’ll come home and say ‘well, we have a partial agreement’. They might come home and say ‘well, we’re really pleased that you’ve done this, and we’ve done that, and everybody seems to be looking to move in the right direction’”.

Mr Donohue hosted Mr Lighthizer at the lobby group’s headquarters on Monday for a meeting with state-level business group leaders. Along with the US-China trade negotiations, the push for congressional ratification of the USMCA trade deal with Canada and Mexico was at the top of the agenda. 

Mr Donohue said that Mr Lighthizer had pointed to “some movement” from China in the realm of agricultural purchases, but the US trade representative had stressed the “extraordinary challenge” of reaching a deal that would cover thorny issues like the protection of US intellectual property and “equal opportunity” for US companies in China. 

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“He spoke briefly about the kind of agreement he was looking for, and didn’t speak at all about an interim agreement,” Mr Donohue said about Mr Lighthizer’s remarks. “I don’t think we’re going to see the tariffs going away and people feeling that we’ve made a great accomplishment until we have a real agreement — and a real agreement in my opinion will not be buying more crops and doing small things.”

Mr Lighthizer’s spokesman did not respond to a request for comment. USTR staff were expected to meet Chinese officials on Friday to set the stage for a new round of talks in Washington in early October between the US delegation, led by Mr Lighthizer and Steven Mnuchin, the Treasury secretary, and a Chinese team led by Liu He, the vice-premier. 

In recent weeks, US officials have discussed lifting some of the newest tariffs imposed on Chinese products as part of a temporary truce with Beijing, as long as China follows through with some farm purchases, according to people familiar with the matter. However, this is far from the broader deal that was on the table in May before the negotiations fell apart, covering a broad spectrum of thorny issues in the US-China economic relationship. 

“[Mr Lighthizer] was pretty clear that we have to do this one step at a time but that this has to be a real agreement,” Mr Donohue said. “While I’m optimistic about it, I’m also a dead-ass realist and this is not a simple problem,” he said. 

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During the press conference, Mr Donohue was much more bullish about the prospects of the congressional passage of the USMCA, in the wake of intensifying negotiations between Mr Lighthizer and Democrats on Capitol Hill to resolve their differences over the labour, environmental, pharmaceutical and enforcement provisions that have been holding it up.

Mr Donohue said he was unsure of the exact timeline but did expect it to get the green light well before the holiday season. The chamber and other business groups have been lobbying hard to persuade moderate Democrats from swing districts to support the pact, even though powerful unions have been pushing for additional changes and are resisting the vote. 

Mr Donohue stopped short of saying Democrats who backed the USMCA would be rewarded with a chamber endorsement at the next congressional election, but said this would be on their “mind” and he would “personally” defend lawmakers who supported the deal from any attacks.

The chamber is politically bipartisan but heavily favours Republicans in its donations. Neil Bradley, the chamber’s chief policy officer who leads its political activities, said that being an “early supporter” of the USMCA would matter more than voting in favour of the deal after it was already certain to pass.

Via Financial Times