China's New Trade Negotiator, He Lifeng, Is Ready to Play Hardball

Beijing's economic gatekeeper has a clear mandate from President Xi Jinping: China won't be catering to the U.S.

- Lingling Wei

In its deepening face-off with the Trump administration, Beijing's trade negotiator has given a preview of Xi Jinping's chief objective for this trade war: It won't be like last time.

In Geneva in mid-May, Vice Premier He Lifeng extracted a 90-day trade truce from a Trump team that had until then declined to pause a tariff blitz on China the way it had for other countries. The deal calmed the nerves of investors and markets around the world.

Now, after both sides have complained that the other wasn't upholding the terms of the deal, that trade truce is teetering, once again jolting global investors and businesses.

At the center of the storm is He, Xi's economic gatekeeper, who has made clear China's strategy in this trade war is nothing like the approach it had in Trump's first term.

During the Geneva talks, He had removed a final sticking point by agreeing to U.S. demands that China resume rare-earth exports. Yet since then He has dug in his heels, slow-walking approvals of licenses to export the minerals critical in the manufacturing of modern cars and other products.

Beijing blames the U.S. for the breakdown, saying a warning against the use of certain artificial-intelligence chips from China's Huawei Technologies was a renewal of U.S. aggression, and complained to Washington that it undermined the trade deal. It also took offense at the U.S. plan to aggressively revoke visas for Chinese students.

The U.S. said the Huawei warning was a restatement of a previous policy. Trump has expressed hopes to talk to Xi directly to break the impasse. A call could happen as early as this week, the White House said.

New mandate

During Trump's first presidency, two years of trade negotiations between Beijing and Washington yielded a deal widely seen as favoring the U.S. At the time, the China team was led by a Harvard-trained, pro-market pragmatist who understood U.S. concerns.