National Post (National Edition)
Markets jump on positive signs from China-u.s. talks.
But few details after unexpected third day
WASHINGTON •Threedays of U.s.-chinese talks aimed at ending a costly tariff battle wrapped up Wednesday in an optimistic atmosphere, with President Donald Trump saying they were “going very well!”
A statement from the Office of the U.S. Trade Representative did not characterize the tone of the talks or say what would happen next, noting only that the U.S. delegation would await “guidance on the next steps” after reporting back to Washington.
The U.S. statement said the negotiations dealt with the need for any deal with China to be “subject to ongoing verification and effective enforcement” — a comment that reflects U.S. frustration that the Chinese have failed to live up to past commitments.
The U.S. also said the negotiations “focused on China’s pledge to purchase a substantial amount of agricultural, energy, manufactured goods and other products and services from the United States.”
Trump has complained repeatedly about the U.S. trade deficit with China, which last year likely exceeded the 2017 gap of US$336 billion.
“We’re optimistic,” White House press secretary Sarah Huckabee Sanders told the Fox Business Network, adding that “we expect that something will come of this. I don’t know the timing and exactly what that will look like, but what I can be sure of is that we are moving towards a more balanced and reciprocal trade agreement with China.”
Stocks surged Wednesday on optimism that the midlevel talks in Beijing will be followed up with discussions between higher-ranking U.S. and Chinese officials.
Investors were encouraged that talks planned for two days were extended to three. Hong Kong’s main market index closed up 2.1 per cent and Tokyo rose 1.1 per cent.
“We can confidently say that enough progress was made that the discussions will continue at a higher level,” said Craig Allen, president of the U.s.-china Business Council. “That is very positive.”
The council and other U.S. business groups have pressed for a resolution to the trade hostilities between the world’s two biggest economies.
The talks that started Monday were the first faceto-face meetings since Trump and his Chinese counterpart, Xi Jinping, agreed Dec. 1 to suspend further action against each other’s imports for 90 days while they negotiate over U.S. complaints that Beijing steals or pressures firms to hand over technology.
Washington wants Beijing to change its plans to use government support to make Chinese companies world leaders in robotics and advanced technologies.
Chinese officials have suggested Beijing might alter its industrial plans but reject pressure to abandon what they consider a path to prosperity and global influence.
Neither side has given any indication its basic position has changed.
Economists say the 90-day window is too short to resolve all the conflicts between the biggest and second-biggest global economies.
“Even if a deal is cobbled together, the more strident trade hawks in the White House and Trump may not sign off,” Mizuho Bank’s Vishnu Varathan said in a report.
Chinese exports to the U.S. have held up despite tariff increases of up to 25 per cent on Us$250-billion of Chinese imports, partly due to exporters rushing to fill orders before more increases hit.
Forecasters expect American orders to slump this year. China has imposed penalties on Us$110-billion of American goods.