Raising the stakes
Trade analysts who say the US insistence that Beijing shrink America’s gaping trade deficit with China by $200 billion by the end of 2020, among other demands, is more likely to raise tensions than to calm them — making it more difficult to resolve the already testy standoff anytime soon.
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beijing — A list of hard-line demands that the Trump administration handed China last week could make it even more difficult to resolve a trade conflict between the world’s two largest economies.
That’s the view of trade analysts who say the US insistence that Beijing shrink America’s gaping trade deficit with China by $200 billion by the end of 2020, among other demands, is more likely to raise tensions than to calm them.
The thrust of the demands is that China should give up policies that favour domestic companies especially in a strategic rivalry with the US over technology — policies Beijing considers core to its state-driven economic model and vital for its future growth.
An editorial on Saturday by China’s ruling Communist Party’s mouthpiece, the People’s Daily, said Beijing was willing to engage in discussions that brought benefits to both sides but would not give in to strong-arm tactics that hurt China’s interests.
“In the face of the US’ fierce offensive of protectionism, China resolutely defends its national interest,” the People’s Daily said. “It will never trade away its core interests and rejects the US’s demand for an exorbitant price.”
A US official confirmed the authenticity of a document outlining US priorities that was presented to China ahead of two days of trade talks that ended on Friday. The official spoke on condition of anonymity because of the confidential nature of the talks.
In Washington on Friday, President Donald Trump said: “We have to bring fairness in trade between the US and China, and we will do that.” Trump had campaigned for the presidency on a promise to reduce America’s trade deficit with China, which amounted last year to $337 billion in goods and services.
“We will be meeting tomorrow to determine the results, but it is hard for China in that they have become very spoiled with US trade wins!” Trump tweeted.
The intensifying trade dispute between the United States and China has rattled financial markets for weeks. In March, the Trump administration slapped tariffs on imported steel and aluminum. China counterpunched with tariffs on a range of US products, including bourbon and blue jeans.
An even higher-stakes fight looms over American allegations that China steals technology and forces US companies to hand over trade secrets in exchange for access to the Chinese market. The United States is considering imposing tariffs on up to $150 billion of Chinese imports, and Beijing has countered with proposed tariffs on $50 billion in American products, including soybeans and small aircraft.
Seeking to avert a trade war, the United States this week sent a highlevel delegation to Beijing, led by Treasury Secretary Steven
We will be meeting tomorrow to determine the results, but it is hard for China in that they have become very spoiled with uS trade wins! US President Donald Trump @realDonaldTrump
Mnuchin. The delegation included Commerce Secretary Wilbur Ross, US Trade Rep. Robert Lighthizer and Peter Navarro, a White House trade adviser and hard-line critic of Chinese policies.
After the talks ended, China’s Commerce Ministry said the two sides had agreed to establish a mechanism to try to resolve their dispute, though differences remained, Chinese state media reported. The report did not give specifics, suggesting that little progress had been achieved.
The US document is described, in an introductory disclaimer, as being provided to the Chinese ahead of the visit to Beijing by the US officials. It included demands that China immediately stop providing subsidies to industries listed in a key industrial plan. —