U.S.-CHINA trade talks end with little progress.
Both sides say session ‘constructive,’ but no new steps taken
American and Chinese negotiators finished talks Wednesday in Shanghai with little progress toward ending a trade war that has shaken the world’s economic confidence and rattled markets.
Treasury Secretary Steven Mnuchin and Robert Lighthizer, the top U.S. trade negotiator, were seen leaving trade talks Wednesday, Chinese state media outlets said.
Both sides “conducted frank, efficient and constructive in-depth exchanges on major issues of common interest in the economic and trade field,” said a statement late Wednesday that was released by China Central Television, China’s state broadcaster.
The White House press secretary, in a statement released Wednesday morning, called the talks “constructive” and said that negotiations were expected to continue in Washington, D.C., in early September.
The White House statement said the two sides discussed topics including “forced technology transfer, intellectual property rights, services, nontariff barriers and agriculture” and that the Chinese side had confirmed its commitment to increasing purchases of U.S. agricultural exports.
The meeting marked the first formal resumption of talks after negotiations fell apart almost three months ago, with each side pointing fingers at the other for derailing a deal. They agreed to try again after meeting in June on the sidelines of the Group of 20 summit in Osaka, Japan.
Instead, both sides appear to be settling in for a lengthy economic conflict.
Senior Chinese officials who gathered at an economic meeting Tuesday run by China’s leader, Xi Jinping, stressed that the country had to rely on domestic demand to manage “new risks and challenges” and ward off what they described as “downward pressure on the economy,” according to the Chinese news outlets. China could turn “a crisis into an opportunity,” the report added.
China’s trade minister, Zhong Shan, played a more prominent role in the discussions than in previous rounds. His greater involvement had
caused concern among some U.S. delegates as he is perceived as a tougher negotiator.
The latest round of talks took place against a backdrop of a fresh outburst by President Donald Trump, who, as delegates gathered Tuesday, let fly at China’s perceived unwillingness to buy American agricultural products and said it continues to “rip off” the U.S. He added that a deal was unlikely before the 2020 U.S. presidential election because China wants to await the outcome.
The People’s Daily, mouthpiece of the Communist Party, responded to Trump on Wednesday with a commentary saying that China has no motive to “rip off” the U.S. and has never done so, and China won’t make concessions against its principles on trade.
Federal Reserve Chairman Jerome Powell addressed the drag from the trade war during a news conference Wednesday after the U.S. central bank cut rates for the first time in more than a decade. “Trade policy uncertainty has been more elevated than we anticipated,” he told reporters. The secondary effects of tariffs, especially the knock to business confidence, have had more impact on the economy than the tariffs themselves, he said.
Craig Allen, president of the U.S.-China Business Council, which represents U.S. companies that do business in China, said he was pleased that U.S. negotiators had traveled to China and that Beijing had agreed to move forward with agricultural purchases.
But expectations for a breakthrough in the trade talks have been low. The two sides are further apart than they were three months ago, when negotiations broke down and each side blamed the other for derailing attempts to reach a deal.
“I had low expectations and still I was disappointed,” David Dollar, a senior fellow at the Brookings Institution, told Bloomberg TV on Wednesday. Putting off the next round of talks until September is an indication that “no one feels any great urgency about reaching a deal.”
“The US-China trade talks are failing American workers, and the latest statement from the White House confirms that,” Scott Paul, president of the Alliance for American Manufacturing, which represents manufacturers and their workers, wrote on Twitter. “A regurgitated pledge to buy more ag products and more talks in September? Trump would have ripped any Democrat for that outcome.”
A lengthy trade war presents China’s leaders with some difficult options. China is enduring an economic slowdown that has been made worse by the trade tensions. Beijing has responded by ratcheting up spending on infrastructure and other big-ticket projects, a reliable growth strategy that nevertheless could worsen the country’s debt problems and do little to solve economic imbalances that could hinder its long-term prospects.
Should China reach a quick deal, on the other hand, the country’s leaders risk looking weak in the face of foreign powers, undermining the Communist Party’s historical claim to rule.