Caixin
Sep 21, 2019 07:19 PM
ECONOMY

China, U.S. Upbeat on Trade Talk Progress Despite Trump Reservations

Photo: VCG
Photo: VCG

China and the U.S. struck a positive tone on the outcome of official mid-level trade negotiations this week, even as U.S President Donald Trump said he was in no hurry to strike a trade agreement and wanted a comprehensive pact rather than a smaller interim deal.

A Chinese delegation of mid-level trade officials held talks on Thursday and Friday with their U.S. counterparts in Washington to set the agenda for discussions between the two countries top trade negotiators next month.

China’s Ministry of Commerce said Saturday the two sides had a “constructive discussion”. The trade deputies discussed scheduling details for next month’s meeting and would remain in communication on related issues, the ministry’s statement said.

The U.S. Trade Representative’s response to the two-day meeting mirrored that positive tone. “These discussions were productive, and the United States looks forward to welcoming a delegation from China for principal-level meetings in October,” the USTR’s office said in a statement Friday.

Still, comments by President Trump on Friday raised questions whether China and the U.S. would be able to reach an interim trade deal in the near future. Expectations of such a deal – centered on China agreeing to buy more U.S. farm products in exchange for the U.S. delaying tariff increases due to take effect October 15 and December 15 – have grown since Trump said on September 12 that he would consider a more limited deal as an interim step to a broad agreement to end the trade war.

During a joint press conference with visiting Australian Prime Minster Scott Morrision, Trump said he did not need to seal a trade deal with China before the 2020 presidential election and was not interested in a partial agreement.

“We’re looking for a complete deal. I’m not looking for a partial deal,” Trump said, widely cited by U.S. media. “I don’t think I need it before the election. I think people know that we’re doing a great job.”

In a further sign that the outlook for the trade talks may not be as positive as previously thought, the Chinese delegation on Friday cancelled a planned visit to the Midwestern farm states of Montana and Nebraska after the talks in Washington concluded, U.S. media reported, citing state officials. U.S. Agriculture Secretary Sonny Perdue had previously announced the farm state tour.

The topics discussed during the mid-level deputies’ meeting included Chinese purchases of U.S. agricultural products, as well as intellectual property protection, a thorny issue that has hindered trade negotiations since the start of the trade war more than 14 months ago.

Ahead of the high-level meeting in October – when a Chinese delegation headed by Vice Premier Liu He will meet with U.S. Trade Representative Robert Lighthizer, U.S. Treasury Secretary Steven Mnuchin and their team -- both sides have taken steps to ease tensions.

Trump said earlier this month that his administration would delay a planned tariff increase by two weeks to avoid the move taking place on October 1, when China will celebrate of the country’s 70th anniversary.

The increase in the levy from 25% to 30% on $250 billion of Chinese goods was postponed until October 15. The president’s decision followed China’s announcement of an exemption for 16 categories of U.S. imports to its 25% tariffs.

The U.S. now plans to impose a 15% tariff on an additional $160 billion of Chinese imports -- including popular consumer products such as cellphones and consumer electronics – on December 15. If the two sides can’t reach a deal to postpone the new tariff, virtually all of U.S. imports of Chinese products would be subject to tariffs by year end.

Contact reporter Mo Yelin (yelinmo@caixin.com)

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