US, China call a truce over trade war, Beijing says
APPARENT DETENTE COMES AFTER MONTHS OF TENSIONS
Washington and Beijing have agreed to abandon any trade war and back off from imposing tariffs on each other, Chinese state media reported yesterday.
The announcement came after high-level talks in the US capital and followed months of tensions over what President Donald Trump has blasted as an unfair commercial relationship between the two economic giants. “We’re putting the trade war on hold, right now, we have agreed to put the tariffs on hold while we try to executive the framework,” Treasury Secretary Steven Mnuchin said on Fox News Sunday.
Vice-Premier Liu He, who led Chinese negotiators in Washington called the agreement a “necessity”, but added: “At the same time it must be realised that unfreezing the ice cannot be done in a day, solving the structural problems of the economic and trade relations between the two countries will take time,” state-run news agency Xinhua reported yesterday.
An earlier joint statement issued in Washington said Beijing would “significantly” increase its purchases of American goods, but offered few details.
The apparent detente comes after months of increasing tensions that have set markets on edge over fears of a damaging trade war. Trump has repeatedly railed against his country’s trade deficit with China, threatening to impose tariffs on Chinese goods.
US levies on $50 billion (Dh183.5 billion) of Chinese imports could have come into effect as early as this week.
Hollywood’s push for greater access to China’s booming film market — delayed since last year — has become tangled in broader trade talks between Washington and Beijing, a potentially thorny position amid whipsawing trade relations.
Negotiations to raise a Chinese quota on imported films and boost the share that overseas producers get of box office takings are now being discussed within the broader framework of a US-China trade stand-off, four industry sources said.
The shift from earlier talks is a double-edged sword for US producers looking at China’s $8.6 billion (Dh31.5 billion) cinema market. It could be bad news if broader talks go sour, but it could offer a potential path forward if the two countries find common ground.
“It wouldn’t really hit the domestic movie business much whether we bring in more foreign movies or not,” said Yu Jianhong, vice president of Beijing Film Academy. “This should be something both parties can agree on.”
China’s quota system allows 34 imported movies a year to be shown in theatres, while overseas producers get a 25 per cent share of box office takings — less than in other international markets. Since 2016 a handful more have been allowed in via a “cultural exchange” channel.
Beijing’s concession
In a government document provided to the US delegation in Beijing two weeks ago, Chinese negotiators said that opening up the market more for US movies was a concession China could offer to Washington as part of a broader trade deal.
The document, seen by Reuters, said that China was “willing to discuss expanding movie imports with the US side”.
Chinese Vice Premier Liu He is currently in Washington leading a Chinese trade delegation on a second round of talks to find a deal with the United States and avert a full-blown trade war between the world’s two biggest economies.
China on Friday said it was dropping an anti-dumping probe into imports of US sorghum, a conciliatory gesture hours after US officials familiar with the matter said China was offering a package to slash the US trade deficit by up to $200 billion.
On Thursday, US President Donald Trump criticised China as being “very spoiled” on trade with the United States but said he was aiming for an overall deal with Beijing.
US studios had hoped for an improved deal for imported films last year. This, however, had been held up as Beijing rejigged its film regulator, handing more control to the ruling Communist Party, and then as trade tensions with the United States grew.
“The movie deal is essentially on pause,” one person familiar with US-China negotiations on the movie agreement told Reuters, adding that Beijing’s willingness to ease up would likely be swayed by the state of trade tensions.
Hollywood producers are pushing for more access, but a bigger share of revenues was even higher on the agenda, especially as locally-made productions became more competitive.
China is also looking to tighten control over content, potentially at odds with allowing in more overseas productions, which generally will have to get past domestic censors.
“China has pledged to open its market on a lot of fronts, but you have to consider the special aspect of culture and entertainment industry,” said Beijing Film Academy’s Yu.