China is unlikely to reach agreement with U.S. trade negotiators, President Donald Trump said, as it prefers to wait and see if the next president takes a different approach. He was speaking to reporters at a press conference July 26 announcing an asylum policy with Guatemala. "I think China would probably say, 'Let’s wait. Let’s wait. Maybe Trump will lose and we can deal with another dope or another stiff,' like the people that allowed these deals to happen, this horrible thing to happen to our country," he said, according to a transcript released by the White House. Trump said that after he wins a second term, China and other countries "almost immediately" are going to sign "phenomenal deals."

Five years of data exclusivity for biologics, an end to panel blocking and undefined "mechanisms and resources" to monitor and enforce labor and environmental laws in Mexico are the core of what the House Democrats have asked the Trump administration to change in its NAFTA rewrite. The House Democrats' working group revealed more of what it is asking for in a report sent to the Speaker's office and released publicly July 26. In that report, they wrote, "It is time for the administration to present its proposals and to show its commitment to passing the new NAFTA... ."

At a press conference attended by dozens of pro-USMCA trade groups, U.S. Chamber of Commerce CEO Thomas Donohue said his group is optimistic that the trade pact will get a vote in September. Donohue held his fingers an inch apart and said, "Lighthizer and Nancy Pelosi are this close," he said, referring to negotiations on changes to the U.S.-Mexico-Canada Agreement between U.S. Trade Representative Robert Lighthizer and the Speaker of the House. Donohue said the Chamber is "very, very willing to move forward" with small fixes, which he characterized as "ornaments on the tree."

The European Commission released a progress report on the EU-U.S. trade talks, saying “concrete actions” have been taken that take the two sides’ “relationship to the next level,” the commission said in a July 25 press release. Since talks officially began one year ago on July 25, the commission said, the EU has “significantly increased” imports of U.S. “liquefied natural gas” and soya beans but also mentioned some roadblocks in negotiations. The commission said it wants to begin negotiations on “eliminating” U.S. tariffs on industrial goods, but “it was not yet possible to launch negotiations in this area due to diverging objectives on the two sides. The commission also said the EU “continues to make the case for ending U.S. tariffs on steel and aluminium,” which would lead the EU to “remove the rebalancing tariffs on U.S.exports.”

U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will hold trade talks in Shanghai that begin July 30. The White House said that the "discussions will cover a range of issues, including intellectual property, forced technology transfer, non-tariff barriers, agriculture, services, the trade deficit, and enforcement."

Xinhua, China's official state-run news agency, reported July 21 that some Chinese firms have requested that retaliatory tariffs on U.S. agricultural goods be lifted, and have made inquiries with U.S. producers about purchasing those goods. The report did not say which commodities are being considered, or in what quantities. However, it noted that the U.S. recently "expressed willingness to encourage U.S. businesses to continue providing supplies for Chinese enterprises," a potential reference to Huawei, and that the government exempted 110 industrial products from Section 301 tariffs. President Donald Trump tweeted July 11 that "China is letting us down in that they have not been buying the agricultural products from our great Farmers that they said they would. Hopefully they will start soon!"

China believes that trade “frictions” with the U.S. “should be resolved through dialogue and consultation,” a Foreign Affairs Ministry spokesperson said on July 17. He was asked about President Donald Trump’s July 16 Cabinet meeting remarks that the U.S. has a “long way to go” before reaching a trade deal with China and can still impose the threatened List 4 Section 301 tariffs on $325 billion worth of Chinese goods “if we want.” If the U.S. “thinks there is still a long way to go before a deal is concluded, well, as the Chinese saying goes, a journey of a thousand miles begins with a single step,” the spokesperson said. “No matter how long the way is, as long as you step forward, you will eventually reach the destination.” In the face of the U.S. threat to impose the List 4 duties, “China will firmly defend its own interests,” the spokesperson said. “If the U.S. does impose new tariffs, that will indeed set new obstacles for the trade talks. There will be an even longer way to go before reaching a deal.”

Consultations over South Korea's monopoly law sought back in March (see 1903150025) occurred July 9, the Office of the U.S. Trade Representative announced. Michael Beeman, assistant U.S. trade representative for Japan, Korea and Asia Pacific Economic Cooperation Affairs, led the consultation in South Korea. The U.S. says South Korea is not living up to its commitments in the U.S.-Korea Free Trade Agreement (KORUS). The agreement says that a party before the Korea Free Trade Commission or the International Trade Commission should be able to review and rebut the evidence against it.

Huawei will remain on the Commerce Department Bureau of Industry and Security's Entity List but "we've opened the door, relaxed a bit the licensing requirements from the Commerce Department where there are not national security influences or consequences," White House Chief Economic Adviser Larry Kudlow said at a CNBC Capital Exchange event July 9. For example, "some of the chip companies would be permitted to sell on a limited basis to Huawei," he said. Those may be parts for "general merchandise" that ends up in countries "where we don't hold any great cachet," such as South Korea or Vietnam, he said. "That's the sort of thing that will be opened up that was closed." Kudlow also noted that China and the U.S. aren't far apart in their trade talks, but said that sometimes the last pieces can be the most difficult to resolve. China has resisted U.S. requests for change in Chinese laws and for enforcement provisions, he said.

The Commerce Department posted an updated version of its "Foreign Retaliation Product Scope Matrix" that lists U.S. goods that are included in various countries' retaliatory tariffs. The list includes the affected subheadings and which country's tariffs include the subheadings. The list includes the retaliatory measures by China, the EU, India, Turkey and Russia.