\u201cPart of the problem is the Trump administration is very weak on Chinese experience\u201d \u2014 Max Baucus, former senator and U.S. ambassador to China<\/em><\/p>\n<\/blockquote>\n The conversations, with Vice Premier Liu He and other Chinese officials, have focused on explaining where various administration officials stand on tariffs, a difficult task given the widely divergent viewpoints inside the administration.<\/p>\n Treasury Secretary Steven Mnuchin, who recently declared the trade war with China to be \u201con hold,\u201d and National Economic Council Director Larry Kudlow generally support free trade and worry about economic dislocations from an escalating trade war. Commerce Secretary Wilbur Ross, senior trade adviser Peter Navarro and U.S. Trade Representative Robert Lighthizer take a tougher view.<\/p>\n Senior Wall Street executives often focus on explaining these differences to Chinese leaders, as well as how Trump himself can seem at times highly conciliatory and inclined toward a deal and at other times bellicose and ready to impose hundreds of billions of dollars worth of tariffs.<\/p>\n \u201cI wouldnt say they are guiding the Chinese on negotiating strategies because that would not be appropriate,\u201d said a senior Wall Street executive familiar with the back-channel talks. \u201cIts been more just trying to help them sort through who the players are and how they interact with each other and how influential they are with the president.\u201d<\/p>\n U.S. Treasury Secretary Steve Mnuchin | Mandel Ngan\/AFP via Getty Images<\/p>\n This person added that the Chinese have had a great deal of trouble understanding how Trump operates: \u201cThey see this disconnect between Trump building a relationship with [Chinese President] Xi Jinping on North Korea and then all his harsh rhetoric on trade. The Chinese know they will eventually have to make some serious concessions, but they dont really know what they are and who really speaks for the president.\u201d<\/p>\n Mnuchin, Ross and Lighthizer, as well as U.S. Ambassador to China Terry Branstad, communicate regularly with Chinese officials.<\/p>\n But the back-channel conversations underscore the level of importance that Chinese officials place on personal relationships; they value dealing with people they know. With a few notable exceptions, such as Ross and Branstad, most high-level administration officials have spent little time in China.<\/p>\n \u201cPart of the problem is the Trump administration is very weak on Chinese experience,\u201d said former Senator Max Baucus, who served as ambassador to China under President Barack Obama. But he said the problem extends back before Trump took office, arguing that the U.S. government has long suffered from having too few people with years of government experience in China.<\/p>\n Early on in Trumps term, Chinas ambassador to the U.S., Cui Tiankai, spent time building a relationship with the presidents son-in-law, Jared Kushner. A source close to the administration said Kushner was \u201cinstrumental\u201d in setting up the meeting between Chinese President Xi Jinping and Trump at Mar-a-Lago in April 2017.<\/p>\n But now, high-level conversations often take place between Xi and Trump themselves, sources say.<\/p>\n \u201cI really like the fact that the Trump administration is putting a big emphasis on technology and intellectual property\u201d \u2014 Hank Paulson, former U.S. treasury secretary<\/em><\/p>\n<\/blockquote>\n \u201cThose presidents have a great relationship, they really do. And they talk often,\u201d the source close to the administration said. \u201cThat is what keeps the delegations from both sides continuing to come together to try to find this. Both the presidents are telling their teams, We need to get this done.\u201d<\/p>\n The person close to Schwarzman, who has a long history of very close business and personal relations with Beijing, described the Blackstone CEOs efforts as a kind of \u201cshuttle diplomacy\u201d aimed at helping the two governments understand one another.<\/p>\n Schwarzman, who regularly dines with and advises Trump on China and other topics, does not feel his efforts have been very successful thus far, but is not giving up on trying to help the nations avoid a potentially damaging trade fight.<\/p>\n \u201cHes been involved in some of these conversations and been a resource for the Chinese and someone they consult occasionally,\u201d the person close to Schwarzman said.<\/p>\n Paulson is also a veteran China hand who spent years as CEO of Goldman Sachs building inroads with Chinese leadership to develop the investment banks business in the country before he became Treasury secretary under former President George W. Bush. He wrote a 2015 book about his experiences called \u201cDealing with China\u201d and runs the Paulson Institute, which works with the Chinese on sustainable development and climate change.<\/p>\n And hes spoken publicly about what he sees as positive aspects of the administrations approach to China. \u201cI really like the fact that the Trump administration is putting a big emphasis on technology and intellectual property,\u201d he said at an event in April. \u201cIm not expecting China to abandon its industrial policy, but I do believe there is plenty of room to change the competitive landscape.\u201d<\/p>\n Paulson, Schwarzman, Dimon and others are now trying to help the Chinese figure out how to engage with the Trump administration to come up with a set of reforms palatable to both sides that would end the series of escalating tariffs.<\/p>\n \u201cMy approach is always to be bluntly honest and try to help them understand the pieces,\u201d said Taiya Smith, who worked under Paulson to develop formalized trade talks between Washington and Beijing, in an initiative then called the Strategic Economic Dialogue.<\/p>\n \u201cIf you care about growth of the U.S. economy and you care about U.S. interests, we want them to understand us the best that they can,\u201d she said. \u201cWe really want them to understand the depth of concern with their country.\u201d<\/p>\n WASHINGTON \u2014 As China and the United States escalate a trade war, the Chinese government is turning ..<\/p>\n","protected":false},"author":1,"featured_media":85417,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[202],"tags":[],"class_list":["post-85416","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance"],"yoast_head":"\n![](\"https:\/\/www.politico.eu\/wp-content\/uploads\/2018\/06\/GettyImages-979524078-714x469.jpg\"\/)
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