The urban press is reporting this week that U.S. and Chinese negotiators have ended a new round of talks aimed at ending a tariff war over trade and technology with no word of any “breakthrough” level of progress.
For example, the Washington Post reported from Shanghai that this week’s two days of talks, the first since Presidents Donald Trump and Xi Jinping agreed to resume negotiations that collapsed in May, ended Wednesday afternoon about 40 minutes ahead of schedule. “Neither delegation spoke to reporters before U.S. Trade Representative Robert Lighthizer and Treasury Secretary Mnuchin left for the airport.”
The Post added that mostly the “same disagreements remain, with no indication either government is willing to offer major concessions.”
The Post also noted that ahead of the meeting, “President Donald Trump rattled financial markets by accusing Beijing of trying to stall in hopes he will fail to win re-election in 2020.”
The dispute over U.S. complaints that Beijing steals or pressures companies to hand over technology has battered exporters on both sides and disrupted trade in goods from soybeans to medical equipment. The U.S. administration has raised tariffs on $250 billion worth of Chinese imports while Beijing responded by taxing $110 billion of U.S. products.
Chinese leaders are resisting U.S. pressure to roll back plans for government-led development of industry leaders in robotics, artificial intelligence and other technologies. Washington complains those efforts depend on stealing or pressuring foreign companies to hand over technology.
For their part, American negotiators are reluctant to cede to Chinese demands that punitive U.S. tariffs be lifted immediately. “President Trump wants to keep some penalties in place to ensure Beijing carries out any agreement,” the Post said.
Rhetoric on both sides has hardened, prompting suggestions U.S. and Chinese leaders are settling in for a “war of attrition,” the Post said.
President Trump’s earlier comments included the observation that if reelected, he would get “much tougher” with Beijing. “China would love to wait and just hope,” he said, and suggested that they will “pray that Trump loses…and then they’ll make a deal with a stiff, somebody that doesn’t know what they’re doing.”
Asian stock markets tumbled in response. The Shanghai Composite Index shed 0.7%, Hong Kong’s market benchmark dropped 1.3% and Tokyo lost 0.9%.
Trump’s “aggressively tinged” remarks were a “stark reminder to investors that the U.S. and China are no closer to an agreement and, in fact, might be drifting farther apart,” said Stephen Innes of VM Markets in a report.
Also on Wednesday, Bloomberg presented a somewhat more optimistic report of the talks. It noted that U.S. and Chinese trade negotiators plan to meet again in early September and that the negotiators had discussed China’s import of agriculture products from the U.S. “based on its needs.” It cited China’s state-run news agency Xinhua’s report that the September gathering will “include high-level officials.”
The White House also reported that the talks had included “the Chinese side’s commitment to increase purchases of United States agricultural exports.”
Relations between the delegates appeared cordial, according to the pool report. Xinhua said it was a candid, efficient and constructive exchange on major economic and trade issues. China’s trade minister Zhong Shan played a more prominent role in the discussions than in previous rounds, although “his greater involvement had caused concerns among some U.S. delegates as he is perceived as a tougher negotiator.”
Expectations for a breakthrough in the talks have been low and Bloomberg suggested that “the two sides are further apart now than they were three months ago, when negotiations broke down and each side blamed the other for derailing attempts to reach a deal.”
So, there seems to be very little good news from the recent talks, except that they are expected to resume in a few days. Observers are paying close attention to the level of China’s food product imports, in hopes of some breakthrough there — but overall reasons for optimism in these important talks seem to continue to be scarce, Washington Insider believes.
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