Multibillion-dollar deals lined up for Trump's China visit
Scores of big firms to accompany US president on visit to Beijing that looks set to garner some huge agreements and boost the US economy
Representatives from about 40 companies are expected to accompany the US president Donald Trump on the first presidential trade mission to China November 8 to10 and sign deals for billions of dollars in US investments.
One of the biggest deals the Trump administration is currently negotiating is a multibillion-dollar energy investment from the Chinese oil and gas major Sinopec that would bring thousands of new jobs to hurricane-ravaged areas in Texas and the US Virgin Islands. Many of the deals, including the China Petroleum investment, are expected be in the form of nonbinding memorandums of understanding, not contracts.
Among the companies tentatively listed as working on China-related deals in conjunction with the trip, according to a government document obtained by Bloomberg News, are General Electric, Honeywell International, Westinghouse Electric , Alaska Gasline Development, Boeing and Qualcomm. The companies represent a variety of sectors from life sciences to heavy machinery. Other companies that may have deals in progress, according to the document, include Cheniere Energy, Terex, Thermo Fisher Scientific, Applied Materials, Caterpillar and Blackstone Group.
Not all of the companies are expected to travel with Mr Trump as part of the trade mission. A Caterpillar spokeswoman, Rachel Potts, said the company had not applied to participate.
Details of the project in the hurricane zones in Texas and the Virgin Islands are yet to be finalised, but Sinopec is expected to partner ArcLight Capital, a Boston-based infrastructure investment firm, and Freepoint Commodities, a Connecticut commodity trading firm. The deal is expected to be worth more than US$7 billion in investments in the US.
The project would include construction of a 1,120km pipeline from the Permian oilfield in western Texas to the Gulf Coast, as well as a storage facility there. Separately, Sinopec would expand the existing oil storage facility known as Lime Tree in St Croix, according to a person familiar with the proposal.
The deal will still need final approval from officials in both the US and China.
But all of these development deals may provide a political boost to the US president, who focused much of his time on the campaign trail arguing that he was uniquely qualified to attract jobs and investment back to the US.
The commerce secretary Wilbur Ross said the US hoped there would be “very good deliverables” during Mr Trump’s visit when he visited China last month.
“We are looking forward to a very good session including a lot of American CEOs and we hope there will be some very good deliverables,” Mr Ross said.
Relations between the US and China have become strained as Mr Trump has repeatedly criticised the country’s trade deficit and demanded Beijing act more forcefully to prevent the development of North Korea’s nuclear and ballistic missile programmes.
In September, the White House blocked the sale of US-based Lattice Semiconductor to a Chinese firm citing national security concerns, and a month earlier the president authorised an investigation into Chinese intellectual property theft.
Ahead of the trip, the US and China announced on Friday an agreement to recognise each other’s aircraft safety approvals. The deal may boost China’s aviation industry and make it easier for companies such as Boeing to sell products there.
The Sinopec deal alone could reduce the trade deficit between the countries by as much as US$10 billion a year, according to one person with knowledge of the negotiations. And the project’s focus on areas impacted by recent hurricanes could also provide a political benefit to the president, who has faced criticism over his handling of storm damage, particularly in Puerto Rico. Just 44 per cent of Americans approve of the president’s handling of the federal response to recent hurricanes, while 47 per cent disapprove, according to a CNN poll released last Monday.
US firms selected as part of the delegation accompanying Mr Trump to China also expect a boost in their business as well. More than 100 different companies applied to be part of the trade mission, with the administration expected to choose around 40 to send representatives to join Mr Trump in Beijing. US officials are expected to announce which companies have been selected shortly.
Mr Trump is expected to promote those companies throughout his trip, including during meetings with the Chinese president Xi Jinping. Mr Xi visited Mr Trump’s golf resort in Mar-a-Lago in April for a meeting where the two leaders agreed to develop a "100-day plan" to reduce the trade deficit between the two countries and bolster American exports.
The president will probably emphasise US liquefied natural gas and its role in lowering the trade deficit, and negotiate for China to buy more LNG from the US in the future, two people familiar with the matter said.
The president’s 10-day Asia trip will also include stops in Japan and South Korea, as well as the Asia-Pacific Economic Cooperation and Association of South East Asian Nations summits in Vietnam and the Philippines.
Updated: October 29, 2017 09:10 AM