US hands China lengthy list of trade demands

CRUCIAL trade talks between the US and China have resulted in lists of demands from both sides.

Hopes for more meaningful progress on the future trading relationship between the world’s two largest economies were undermined by the US demands, which asked China to reduce the trade deficit by $200bn (£148bn) by 2020. The US requirements, laid out in a leaked paper, demand that the gap between the value of goods the US buys from China, and the US goods bought by Chinese consumers, be dramatically cut. US treasury secretary Steven Mnuchin said there was a “very good conversation” between the two sides.

However, sources close to Chinese officials were quoted by The Wall Street Journal as saying that the US demands were “unfair”. The leaked paper said there was an “immediate need” to reduce the deficit, and called for an instant halting of “market distorting subsidies”. This would be extremely hard to achieve rapidly, according to economists, and is therefore a major stumbling block to future negotiations. Trade deficits have been made a political priority in all of US president Donald Trump’s trade disputes so far.

Cyber-spying activities in the US, carried out by China, would also have to stop, according to a document laying out the American requirements. It added that China needed to realise that some of its investments could distort global trade. The paper also called for quarterly meetings between the two sides to review progress on “targets and reforms”. A failure to hit those targets would result in the US imposing additional tariffs on Chinese products.

The list of demands also included China withdrawing complaints that it has made to the World Trade Organisation about the EU and US calling it a non-market economy. This designation allows the US and EU to treat China differently from other market-based economies under international trade law.

Tensions about excessive Chinese steel production as a result of state subsidies, and theft of US intellectual property have been the main factors in the trade dispute between the two countries.

The Chinese authorities have produced a similar paper including demands of the US, according to Reuters.

$200bn The amount the US wants China to reduce the trade deficit by, before 2020