US-China Trade Talks Fail To Break Deadlock
In December the USA and China fuelled hopes that a solution could be found to their trade war which has been slowing global trade as well as harming both the US and Chinese economies when they agreed that there would be no further imposition of fresh tariffs for a 90 day cooling off period. That period is due to end next month.
The current round of Chinese US trade negotiations have concluded without any break through, raising the possibility of a renewed wave of tit-for-tat tariffs to be applied – the US has earmarked tariffs on $200 billion worth of Chinese imports levied at between 10 and 25%.
Despite the impasse, both sides struck a somewhat upbeat note with US negotiator, Robert Lighthizer noting: "We feel that we have to make headway on some very, very important and very difficult issues," whilst conceding that some “very difficult issues” remain to be resolved, but said he was hopeful of progress.
Talks will continue in the USA next week with the Chinese President, Xi Jinping hoping that both sides would “continue to work hard to promote a mutually beneficial and win-win agreement”.
President Trump had suggested that the deadline for agreement of 1st March when new tariffs are to be levied might be pushed back if the negotiations are making good progress.
The basis for the trade war, which was initiated by the USA, is that the US feels that China favours its companies at the expense of international (well, US!) competition by the applications of subsidies and other means of support. It is seeking changes to China’s economic policies and wants China to do more to protect what it claims are US intellectual property rights. A further aim is to boost US exports (and access) to the Chinese market. Whist China is willing to buy more US goods (notably semiconductors and soybeans) any change to economic policies will meet stiff opposition.
There is suspicion in some Chinese circles that the USA is seeking to use the pretext of a trade war to rein-in China’s rise as an economic superpower and limit its global influence.