U.S.-China trade talks produce little

Trump administration’s hard line could exacerbate tensions

BEIJING — A list of hard-line demands that the Trump administration handed China this week could make it even more difficult to resolve a trade conflict between the world’s two largest economies.

That’s the view of trade analysts who say the U.S. insistence that Beijing shrink America’s gaping trade deficit with China by a hefty $200 billion by the end of 2020, among other demands, are more likely to raise tensions.

A U.S. official confirmed the authenticity of a document outlining U.S. priorities that was presented to China ahead of two days of trade talks that ended Friday. The official spoke on condition of anonymity.

In Washington on Friday, President Donald Trump said, “We have to bring fairness in trade between the U.S. and China, and we will do that.”

Earlier, Trump had said he wanted Beijing to cut by $100 billion the chronic U.S. trade deficit in goods, which Washington says stood at a record $375.2 billion last year.

After the talks, China’s Commerce Ministry said the two sides had agreed to establish a mechanism to try to work through their dispute, though differences remained, Chinese state media reported. The report did not give specifics, suggesting that little progress had been achieved.

The U.S. document included demands that China immediately stop providing subsidies to industries listed in a key industrial plan. China must end some of its policies related to technology transfers, a key source of tension underlying the dispute, the list also says.

The U.S. wants China not to retaliate against U.S. measures being pursued against it. For instance, the U.S. says China should agree not to target U.S. agricultural products and “not oppose, challenge or otherwise retaliate” when the U.S. moves to restrict Chinese investment in the U.S. in sensitive sectors.

American analysts were struck by the aggressiveness of the demands. Eswar Prasad, a professor of trade policy at Cornell University, said the hard-nosed approach “makes it harder to envision a path toward a negotiated settlement.”

Prasad said the Chinese are open to negotiations on opening their markets and doing a better job of protecting intellectual property. “Beijing is clearly in no mood, however, to meet the U.S. team’s expectation of capitulation in the face of threats of tariffs and other trade sanctions,” he said.

The list was widely circulated on Chinese social media Friday, drawing hundreds of comments from Chinese internet users criticizing the U.S.

“China won’t be frightened by this kind of threat,” wrote Hu Xijin, the chief editor of the Global Times, a nationalistic tabloid affiliated with the Communist Party mouthpiece. Hu said he believed China would engage in talks seriously but also be fully prepared for them to fail.

“China will never trade off its core interests,” Hu wrote.

Still, the list was welcomed by a U.S. business group that has lobbied the Trump administration for greater clarity on what it wanted China to do.