China con­fi­dent of trade deal af­ter US cease­fire

Trump threat­ens to re­vert to tar­iffs if ‘a real deal’ is not reached

The Irish Times - Business - - BUSINESS NEWS - REUTERS CLIF­FORD COONAN in Bei­jing

China is con­fi­dent it can reach a full deal on trade with the US, de­spite threats from US pres­i­dent Don­ald Trump to re­vert to tar­iffs if he doesn’t get a “real deal”, af­ter the world’s two big­gest economies reached a truce in their trade war.

Mr Trump and Chi­nese pres­i­dent Xi Jin­ping reached a tem­po­rary truce in their trade war at a meet­ing over din­ner at the G20 at the week­end, but Mr Trump warned tar­iffs would be back on the ta­ble if they did not find a res­o­lu­tion.

“The ne­go­ti­a­tions with China have al­ready started. Un­less ex­tended, they will end 90 days from the date of our won­der­ful and very warm din­ner with Pres­i­dent Xi in Ar­gentina,” Mr Trump tweeted.

“I am a Tar­iff Man. When peo­ple or coun­tries come in to raid the great wealth of our Na­tion, I want them to pay for the priv­i­lege of do­ing so. It will al­ways be the best way to max out our eco­nomic power. We are right now tak­ing in $bil­lions in Tar­iffs. MAKE AMER­ICA RICH AGAIN,” he tweeted.

In a brief state­ment, the Chi­nese com­merce min­istry said the talks had been “very suc­cess­ful”, and that China was very con­fi­dent of im­ple­ment­ing it.

“The trade teams from both par­ties will ac­tively pro­mote the ne­go­ti­a­tion work within 90 days in ac­cor­dance with a clear timetable and road map,” it said. “China will start by car­ry­ing out the spe­cific mat­ters which have been agreed on. The faster, the bet­ter.”

The trade war has cast a shadow over fi­nan­cial mar­kets this year, which ini­tially wel­comed news of the truce. How­ever, the prospect of more trade ten­sions fur­ther down the road con­tin­ues to weigh on the global econ­omy.

More space

“The 90 days is a win for the Chi­nese as it cre­ates a lot more space and they need that time. It gets them through the Na­tional Peo­ple’s Congress and Trump has said it can be ex­tended. So it kind of freezes in place the cur­rent power struc­ture,” Rod­ney Jones, prin­ci­pal of Wi­gram Cap­i­tal Ad­vi­sors, told The Ir­ish Times.

“As the US econ­omy slows it be­comes harder for Trump to im­pose more tar­iffs, and China will do bits and pieces but won’t de­liver much.Tar­iffs have a ten­dency to get frozen in place,” said Mr Jones. “The US-China re­la­tion­ship has frac­tured. This stops an es­ca­la­tion.”

The US said China had com­mit­ted to start buy­ing more Amer­i­can prod­ucts im­me­di­ately, while lift­ing tar­iff and non-tar­iff bar­ri­ers, as well as be­gin­ning talks about forced tech­nol­ogy trans­fers and in­tel­lec­tual prop­erty pro­tec­tion.

The US has al­ready put tar­iffs of $250 bil­lion (€220bn) on Chi­nese goods, and vowed to add tar­iffs on a fur­ther $267 bil­lion if Bei­jing does not change its prac­tices. For its part, China has im­posed du­ties on about $110 bil­lion in US prod­ucts.

PHO­TO­GRAPH:

The trade dis­agree­ment be­tween China and the US has weighed on mar­kets this year.

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