Trade talks move to Washington as March 1 deadline nears
February 19, 2019 Category Foreign trade, Weekly
(from left to right) U.S. Trade Representative Robert Lighthizer, Chinese Vice Premier Liu He and U.S.Treasury Secretary Steven Mnuchin in Beijing
Chinese President Xi Jinping met the U.S. trade delegation in Beijing for talks on the trade war, including Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin. Xi said “China would like to address the problems of economic and trade frictions with the United States in a cooperative way to promote the conclusion of a deal acceptable to both sides.” It was the first time the Chinese President met with the U.S. trade delegation since the trade talks began last year. The talks are this week moving to Washington as a Memorandum of Understanding (MOU) is being prepared. There is still no firm date for Presidents Trump and Xi to meet and seal a final agreement.
U.S. President Donald Trump said that the talks “went extremely well” and that he was inclined to push back the March 1 deadline after which U.S. import tariffs on USD200 billion of Chinese goods would be raised from 10% to 25% in the absence of a deal. “If we’re close to a deal where we think we can make a real deal, and it’s going to get done, I could see myself letting that slide for a little while,”Trump said, perhaps extending the deadline by 60 days. “We want very much to make a deal,” Trump said. He added that a delay was justified, based on the scope and scale of the talks. Speaking on the White House lawn, he said: “Trade with China – how big does that get? It must be the biggest deal in history.”
Seven U.S. Democratic Senators urged President Donald Trump to press China for a trade deal that fully addresses the technology transfer and intellectual property concerns. Led by Senator Robert Menendez of New Jersey, the Senators said in a letter to Trump that any deal with Beijing must at a minimum commit China to “cease the predatory practices” identified in the section 301 investigation by the Office of the U.S. Trade Representative (USTR), which formed the basis for U.S. tariffs on Chinese goods.
Trade flows between China and the United States are shrinking quickly as a result of the trade war. Chinese imports of U.S. products plunged 41.1% from a year earlier to USD9.2 billion last month, the lowest since February 2016, according to the Chinese General Administration of Customs. The fall in U.S. exports to China contrasted sharply with China’s overall imports last month, which remained largely steady with only a 1.5% fall year-on-year. China’s imports from the U.S. have now fallen for eight consecutive months, month-on-month, the longest period of continuous decline since monthly bilateral trade data was first made available in 1999. In January alone, China’s imports from the U.S. were smaller than its imports from Australia, South Korea, Taiwan or Germany. One of the few U.S. products China is buying more of is soybeans, increasing 29% from December, after China agreed to make more purchases during trade negotiations. Going the other way, Chinese exports to the U.S. fell slightly, down 2.4% to USD36.5 billion in January.
The United States must change course and compete smarter with China rather than sever ties between the world’s two biggest economies, a group of prominent American China-watchers and former U.S. officials has warned in a report by a task force led by Orville Schell of the Asia Society’s Center on U.S.-China Relations and former U.S. Deputy Assistant Secretary of State Susan Shirk, who is now with the University of California San Diego’s 21st Century China Center. While the 17 members of the group supported a tougher approach against Beijing, they said the present U.S. strategy was “defective” in various aspects including the economy and security.
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