China-U.S. talks show progress
U.S. officials say they have made “progress” in trade talks with China ahead of a March 2 deadline for tariffs to be raised on $200 billion worth of Chinese goods.
U.S. officials said Friday that they had made “progress” during a week of trade talks with their Chinese counterparts, but big sticking points remain and the two sides plan to continue negotiations next week in Washington to try and end the trade war.
The United States and China are trying to reach an agreement ahead of a March 2 deadline, when President Donald Trump has threatened to raise tariffs on $200 billion worth of Chinese goods to 25 percent from 10 percent. On Friday, Trump suggested for the second time in a week that he would push the deadline back if the two sides were edging closer to a deal.
The comments sparked a flurry of stock market activity, sending prices generally higher on the belief the end of the trade war with China was near.
“There is a possibility that I will extend the date,” Trump said during remarks at the White House, noting the complexity of the negotiations. “I will do that at the same tariffs we are at now; I would not increase the tariffs.”
Trump said the discussions with Beijing were going “extremely well” but added the only thing that matters is whether the two sides can reach a deal that resolves his concerns about China’s trade prac-
tices.
“We’re a lot closer than we ever were in this country to having a real trade deal,” Trump said, adding that the agreement with China would cover “theft” and “unfairness.”
But significant differences remain in the trade talks, and it is unclear whether they can be resolved, people briefed on the negotiations said.
“These detailed and intensive discussions led to progress between the two parties,” the White House press secretary said in a statement. “Much work remains, however.”
American officials said that the talks focused on socalled structural reforms that the United States wants China to make, and on China’s purchase of U.S. goods and services. The White House on Friday said that any agreement between the two countries will be included in a “memoranda of understanding between the two countries.”
The most difficult and intractable issue involves the Trump administration’s desire to put meaningful restrictions on China’s ability to keep investing enormous sums of money from the government and from government-affiliated financial institutions, in a wide range of advanced manufacturing sectors that compete with U.S. industries. These include areas like commercial aircraft manufacturing, semiconductors and artificial intelligence.
Another challenge for negotiators is that both sides perceive national security as being at stake in some cases.
China has been reluctant to unblock internet access to its market for some of Silicon Valley’s biggest and most successful businesses, like Facebook and Google. It fears that without stringent censorship, everything from democratic ideas to pornography would be harder to fight.
Trump said U.S. tariffs on $250 billion worth of Chinese imports are hurting China “very badly” and that it would be “an honor” to remove them if an agreement can be reached. He acknowledged that a deal of such magnitude could take more than just a few weeks.
The president, speaking from the Rose Garden, added he will likely meet with President Xi Jinping of China “at some point” to work out any remaining differences between the two countries.
The prospect of extending the March deadline has divided Trump’s economic advisers, with hard-liners such as Robert Lighthizer, the administration’s top trade negotiator, increasingly wary that China is attempting to run out the clock or clinch an unenforceable deal that it will ultimately break. A delay in the deadline would be viewed internally as a win for Steven Mnuchin, the Treasury secretary, who has been pushing hard to put the trade war to rest and calm markets.
Mnuchin said that he and Lighthizer had “productive meetings” with Liu He, China’s economic czar.
Lighthizer and Mnuchin also met with Xi on Friday afternoon at the Great Hall of the People. Stocks in the United States were up by nearly 1 percent midday on Friday as optimism about the state of the negotiations calmed jittery investors.
The talks did allow both sides to at least begin hashing out their differences.
Both the United States and China began somewhat mechanically combining their respective lists of offers into a memorandum of understanding that included areas of disagreement in bracketed text, with each side’s separate views listed for each issue.