Trade War | No word on progress after second day of China-US talks

Undersecretary for International Affairs David Malpass (left) who is part of U.S. trade delegation leaves from a hotel for a second day of meetings with Chinese officials in Beijing yesterday

Talks between the U.S. and China on ending their tariff war were ending their second day yesterday without word on whether they’ve made any progress, as an official newspaper warned not to push Beijing too hard.

China is strong and has its own needs, said the Global Times, published by the ruling Communist Party. Washington “cannot push China too far” and must avoid a situation that “spins out of control.”

Negotiators began the talks Monday on the trade war launched by President Donald Trump in July with tariff hikes on Chinese goods in response to complaints that Beijing steals or pressures companies to hand over technology.

Trump and Chinese President Xi Jinping agreed on Dec. 1 to postpone more tariff hikes on each other’s goods for 90 days while they negotiate. But neither side appears to have budged, and economists say three months is too little time to resolve issues that have disrupted U.S.-Chinese relations for years.

Washington is pressing Beijing for changes including rolling back plans for government-led creation of Chinese global champions in robotics and other fields. Europe, Japan and other trading partners echo Washington’s complaints that those violate Beijing’s market- opening obligations.

Chinese officials have suggested Beijing might alter its industrial plans but they have rejected pressure to abandon their blueprint for greater prosperity and global influence. They have tried to defuse pressure for more sweeping change by offering concessions including purchasing more American soybeans, natural gas and other exports.

“China would need to significantly recalibrate its industrial policies to fully meet the U.S. trade team’s demands,” Nick Marro of the Economist Intelligence Unit said in a report. “The limited policy movement that we’ve seen so far suggests that a game-changing deal remains unlikely.”

Also yesterday, North Korean leader Kim Jong-un arrived in Beijing in a possible effort to coordinate with the North’s only major ally ahead of a possible meeting with Trump. U.S. and North Korean officials are believed to have met in Vietnam to discuss a location.

A Chinese foreign ministry spokesman rejected suggestions that Kim’s visit was intended as a bargaining chip during the trade talks.

China’s position on trade is “transparent and the U.S. side is well aware of it,” said Lu Kang. “China does not need to use any other tactics.”

As the talks began Monday at the Chinese Ministry of Commerce, Beijing complained about a U.S. warship in what it said were Chinese waters, but it was unclear whether that would disrupt the proceedings. Both sides have provided scant information about their discussions.

The talks went ahead despite tensions over the arrest of a Chinese tech executive in Canada on U.S. charges related to possible violations of trade sanctions against Iran.

The American delegation is led by a deputy U.S. trade representative, Jeffrey D. Gerrish, and includes agriculture, energy, commerce, treasury and State Department officials.

Trump imposed tariff increases of up to 25 percent on USD250 billion of Chinese imports. China responded by imposing penalties on $110 billion of American goods, slowing customs clearance for U.S. companies and suspending issuing licenses in finance and other businesses.

The Global Times commentary said China’s growing economy means it can “carry out a more intense boycott” of trade with the United States if needed.

Beijing’s growing commercial and political ties with its neighbors will make it harder for Washington to find Asian countries willing to help it try to “contain China,” the newspaper said.

Still, cooling economic growth in both countries is increasing pressure to reach a settlement.

Chinese growth fell to a post-global crisis low of 6.5 percent in the quarter ending in September. Auto sales tumbled 16 percent in November over a year earlier. Weak real estate sales are forcing developers to cut prices.

The U.S. economy grew at an annual rate of 3.4 percent in the third quarter and unemployment is at a five-decade low. But surveys show consumer confidence is weakening because of concern growth will slow this year.

For their part, Chinese officials are unhappy with U.S. curbs on exports of “dual use” technology with possible military applications. They complain China’s companies are treated unfairly in national security reviews of proposed corporate acquisitions, though almost all deals are approved unchanged. Joe McDonald, Beijing, AP