U.S.-China trade talks to continue
‘Closer than we ever were’ to reaching a deal, president says
BEIJING — 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 to end the trade war.
The United States and China are trying to reach an agreement ahead of a March 1 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.
“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 mattered was whether the two sides could reach a deal that reWASHINGTON
solved his concerns about China’s trade practices.
“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 the talks focused on so-called structural reforms that the United States wanted China to make, and on China’s purchase of U.S. goods and services. The White House said Friday that any agreement between the two countries would be included in a memorandum 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 large sums of money from the government and from government-affiliated banks in a wide range of advanced manufacturing sectors that compete with U.S. industries such as commercial aircraft, 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, such as 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 were hurting China “very badly” and that it would be “an honor” to remove them if an agreement could 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 would most 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 trying 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 in Beijing.
“I hope you will continue to work hard to promote a mutually beneficial and win-win agreement,” Xi told Lighthizer, according to the official Xinhua News Agency.
“We feel we have made headway on very, very important and difficult issues,” Lighthizer told Xi. “We have additional work we have to do but we are hopeful.”
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 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, people briefed on the talks said. Compiling the various offers could someday make it possible for the countries’ leaders to go through the options more systematically.
But the broad areas of disagreement still left in the bracketed text mean that a comprehensive understanding between the two sides remains elusive.
The negotiations did not include any big new concessions by China to limit its government-led push to build high-tech industries in competition with the West, said the sources, who insisted on anonymity because of the diplomatic and financial sensitivity of the talks.
“New progress has been made on important and difficult issues,” state-controlled China Central Television said Friday, without providing any details. “Although there is still a lot of work to be done, we have hope.”
China is in the middle of a sharp economic slowdown, triggered partly by Beijing’s efforts to rein in debt but also by a sudden faltering in the willingness of consumers to spend and industries to invest. Many business leaders attribute the decline in consumer and investor confidence to the trade war.
That economic backdrop has given Chinese leaders an incentive to emphasize progress in the talks. Mnuchin has also stressed progress, allaying worries among stock market investors. Lighthizer has said little in public while pressing for a comprehensive trade deal.
Many of the issues, such as how to handle the tech sector, have been festering between the United States and China for a long time. Many hightech issues are also changing and evolving along with the sector, making it especially difficult to put in place a durable agreement.
“Particularly in the areas of technology regulation and standards, it will be a game of Whac-a-Mole at best,” said James Green, who was the top trade official at the U.S. Embassy in Beijing until August and is now a senior nonresident fellow at Georgetown University.
The negotiations this week have encompassed some issues on which incremental progress has been made in recent weeks, people briefed on the negotiations said. China has agreed to disclose more of its government subsidies to the World Trade Organization, these people said.
Chinese officials have also expressed a willingness to let foreign companies participate in panels that set standards on important industrial issues, like fuel-economy averages for cars. But while that might give foreign companies a glimpse of coming rules, they would be in a minority and might not have much influence.
The Trump administration also sees national security at issue in a long list of products that the United States either already imports from China or might be likely to import in the next few years. These include many products, from nuclear reactor components to aircraft engine parts, from among the $50 billion of annual imports on which the administration imposed 25 percent tariffs in the summer.
China has tried repeatedly over the past year and a half to allay U.S. concerns about its government-subsidized investments in high-tech industries by offering to guarantee very large purchases from the United States of everything from soybeans to helicopters.