Commerce Secretary Says There Is a Very Good Chance of China Deal on Tariffs
Commerce Secretary Wilbur Ross told interviewers on CNBC that "there's a very good chance that we will get a reasonable settlement, that China can live with, we can live with and that addresses all of the key issues in the running trade war between the U.S. and China. A U.S. delegation is in China negotiating (see 1901040037). Ross, who was speaking Jan. 7, said that a comprehensive settlement will include soybean and liquefied natural gas purchases by China, structural reforms and enforceability. He said the last is the hardest. "An agreement is fine, but the history here has not been so good on compliance. So the real issue is, what are the punishments if people don't do what they promised to do?"
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Ross pooh-poohed the idea that Apple's earnings were hurt because of the trade war (see 1901030026), since iPhones assembled in China are not subject to tariffs. He did not answer a follow-up question that noted it's Chinese consumers' pullback on purchases, not U.S. tariffs, that caused the revenue miss. He did, however, say that a slowing Chinese economy would have almost no effect on the American economy. "China now understands how dependent they are on us," he said. "ZTE was a big wake-up call to China." Ross also addressed the partial federal government shutdown, which has closed his agency for more than two weeks. He said walls work and that he doesn't know when the shutdown will end.