WASHINGTON — Facing the risk of a mutually harmful trade war, the world's two biggest economies have put their differences on hold. Yet it's far from clear that a fragile truce between the United States and China can hold.
And while Treasury Secretary Steven Mnuchin predicted big increases in agriculture and energy related sales to the Chinese market — moves that could benefit Louisiana farmers and businesses — trade experts said it's too soon to know what will happen.
“It’s still so early to say,” said Caitlin Cain, chief executive officer for the World Trade Center of New Orleans. “It’s all about the details and until they’re all released, we’re just waiting and seeing what happens.”
The fact that the U.S. and China are talking about trade is a nudge in the right direction, she said.
In exchange for the United States agreeing to hold off on tariffs on up to $150 billion in Chinese goods, Beijing agreed over the weekend to "substantially reduce" America's huge trade deficit with China. Beijing made no specific commitment, though.
Treasury Secretary Mnuchin predicted a big increase — 35 percent to 45 percent this year alone — in farm sales to China and a doubling in sales of energy products to the Chinese market.
Those are two important categories for Louisiana in terms of its own production and goods that are shipped through the state's ports along the Mississippi River and Lake Charles area.
Louisiana's second-largest export to China is soybeans. Mineral fuels and products made from those fuels represent nearly 15 percent of the state's exports to the country. The state's emerging liquefied natural gas export industry also faces uncertainty, should China limit imports.
Overall, Louisiana exported nearly $8 billion to China last year, Census Bureau figures show, representing 14 percent of the state's total exports. The nation was Louisiana's largest export market. It also was Louisiana's seventh-largest import market, at just over $1 billion.
"We are not out of the danger zone yet," said Nick Marro, a China analyst with the Economist Intelligence Unit. "There is still a high risk of a trade war, even if the timeline to getting there has been extended."
A vague statement the two countries released said next to nothing about the issue at the heart of the dispute between Washington and Beijing: The hardball tactics China uses to challenge U.S. technological supremacy. Those tactics include a requirement that American companies hand over some of their technology in exchange for access to the Chinese market.
U.S. Trade Rep. Robert Lighthizer issued a sharp statement: "Getting China to open its market to more U.S. exports is significant, but the far more important issues revolve around forced technology transfers, cyber theft and the protection of our innovation."
President Donald Trump is dispatching Commerce Secretary Wilbur Ross to try to settle on the kinds of details that were sidestepped in last week's talks with a Chinese delegation led by Vice Premier Liu He.