Questions remain over US-China deal

Joint statement issued held no indication that China had assented to target set by US for slashing trade deficit

Questions still linger about the agreement between China and the US to avert a trade war.

Last year, the United States had a $375.2 billion (Dh1.3 trillion) trade deficit with China, with populist politicians blaming the Asian powerhouse for the leeching of American jobs over the last few decades.

Washington reportedly had demanded the deficit be slashed by at least $200 billion by 2020. However, the joint statement issued held no indication that China had assented to that target. A foreign ministry official also played down the suggestion.

The statement did say that both sides had agreed on “meaningful increases” in US agriculture and energy exports. VicePremier Liu He, who led Chinese negotiators in Washington, said the new trade cooperation would extend to medical care, hightech products, and finance, according to Xinhua.

Both countries also agreed to strengthen cooperation on protecting intellectual property — a long-standing source of US discontent.

The White House joint statement didn’t mention additional US demands, including a halt to subsidies and other government support for the Made in China 2025 plan that targets strategic industries from robotics to newenergy vehicles. China had made its own demands, including giving equal treatment to its investment, and warned US companies may be excluded from measures to open its economy.

Still, analysts were positive about the results.

“This round of talks is generally positive,” said Li Yong, a senior fellow at the China Association of International Trade in Beijing, adding that the US still may take a harder line on reviews of Chinese investments. “Trade tensions will ease gradually, but there still could be frictions.”

The two countries, their economies enormously interlinked, opened the delicate negotiations a few weeks ago.

This round of talks is generally positive. Trade tensions will ease gradually, but there still could be frictions.” Li Yong | Senior fellow at the China Association of International Trade

Trump had threatened China with tariffs on up to $150 billion of imports, prompting Beijing to warn it would target US agricultural exports, aircraft, and even whiskey.

The White House is wary of hurting largely Republican-voting farm states or damaging the economy before legislative elections this November. But Trump is also keen to appear tough on trade.

On Thursday, he unleashed a barrage of criticism against former US administrations, saying they had allowed Beijing to take advantage of the United States.

“We have been ripped off by China. And an evacuation of wealth like no country has ever seen before given to another country that’s rebuilt itself based on a lot of the money that they’ve taken out of the United States,” he said. “China has become very spoiled.”

The trade issue is complicated by the impending summit meeting in Singapore between Trump and North Korean leader Kim Jong-un, who has consulted with Chinese leader Xi Jinping.

China is North Korea’s biggest trade partner, and Trump has called on it repeatedly to press Pyongyang to rein in its nuclear and missile programmes.

The joint statement made no mention of Chinese telecom giant ZTE, which had suspended operations after US sanctions were imposed to punish it for exporting sensitive materials to Iran and North Korea.

Trump took observers by surprise last week when he tweeted that he and Xi were “working together” to find a way to help ZTE “get back into business, fast.”

If the US and China face further difficulties in the future, Liu said: “We must look at them calmly, maintain dialogue and properly handle them.”