By Timothy Puko
WASHINGTON--Senate Minority Leader Chuck Schumer (D., N.Y.) told President Trump his preliminary trade agreement with China doesn't go far enough, warning that the deal could produce little benefit for American companies and workers, while also emboldening Beijing.
Mr. Schumer, in a letter to the White House released Tuesday morning, said U.S. businesses stand to lose billions of dollars if the administration can't secure concrete commitments from China to stop subsidizing domestic firms and sponsoring efforts to steal intellectual property, among other changes. Making a temporary deal could concede leverage the U.S. needs to pressure China, Mr. Schumer said.
President Trump has enjoyed rare bipartisan support for his trade war with China, and Mr. Schumer's letter could signal that period coming to an end. Mr. Schumer has long backed a hard-line approach to Beijing and sought to discourage trade-friendly officials in the Trump administration from caving to Chinese demands. Last May, when Mr. Trump announced a major increase in tariffs, Mr. Schumer responded quickly with a tweet of support, urging the president to "hang tough on China."
"From what I understand from reading press reports, the terms of the agreement will result in very little progress in reforming China's rapacious trade behaviors and seems like it could send a signal to Chinese negotiators that the U.S. can be steamrolled," Mr. Schumer said in his letter, dated Monday.
Mr. Trump is gearing up for a White House ceremony scheduled for Wednesday to sign a compromise deal with Chinese leaders. The accord promises increased purchases of U.S. goods and services, greater access for American firms to China's banking, insurance and other financial sectors and an end to tariff threats.
However, the deal leaves out the fundamental changes to Chinese economic policy sought by many U.S. leaders and prioritized by Mr. Trump, who has promised further negotiations. Chinese officials, though, feel they have little to gain from a second deal forcing Beijing to ease state control of the economy, and Mr. Trump has already said that a phase-two agreement probably wouldn't conclude until after the November election.
U.S. Trade Representative Robert Lighthizer defended the deal Monday, saying on Fox Business Network that it would include "a variety of real structural changes." He named only one, commitments to refrain from competitive currency devaluation, which Treasury Secretary Steven Mnuchin announced earlier in the day in dropping Treasury's designation of China as a currency manipulator.
Mr. Schumer pressed for more in his letter, foreshadowing what may become a primary response from Democrats and other critics. He asked Mr. Trump to detail any commitments China has made to reduce subsidies to its businesses, on reforming state-owned enterprises, on dumping products on global markets, and on halting cyberattacks and theft.
The trade fight came with costs to the U.S., including lost exports, higher prices to cover tariffs and taxpayer subsidies to help U.S. farmers. Farmers and analysts have been skeptical the preliminary deal can fulfill the administration's promises of dramatic export growth.
"By giving away leverage with a temporary deal...these structural issues will only become more challenging to address in future negotiations," Mr. Schumer wrote. "China pledging to make short-term purchases of American goods will not address the fundamental problems that undermine long-term U.S. economic opportunity, prosperity, and security."
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(END) Dow Jones Newswires
January 14, 2020 06:14 ET (11:14 GMT)
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