Progress unclear after 3 days of U.S.-China trade talks conclude

Elias Hubbard
January 11, 2019

Some disagreements remain on structural issues and they need to be addressed when more senior negotiators meet later on, according to Chinese officials involved in the discussions who asked not to be identified. Still, the path forward remains unclear: Another round of talks hasn't been scheduled, and the government shutdown in the US has dominated President Donald Trump's attention.

Negotiations between the USA and China in Beijing this week on trade were "extensive, in-depth and detailed", and laid the foundation for the resolution of issues of mutual concern, the Ministry of Commerce said in a statement Thursday.

That pledge, addressing a trade deficit in goods, was however mentioned only at the end of the statement which focused on the United States demands for structural changes to China's domestic policies.

One of the biggest challenges to any deal would be to ensure that China enforces whatever is agreed to stop technology transfers, intellectual property theft and hacking of USA computer networks.

While less effusive, a statement released earlier by the Office of the United States Trade Representative (USTR) indicated that the talks had covered a broad range of areas on which the two sides have differed.

A USA guided-missile destroyer sailed near disputed islands in the South China Sea in what China called a "provocation" as United States officials joined talks in Beijing during a truce in a bitter trade war. With industrial output and retail sales growth both at the weakest levels in a decade, China's woes would also mean softer demand for imports, hurting other economies including the U.S.

For its part, China said the meetings were " extensive, in-depth and detailed", and laid the foundation for a resolution of the conflict.

The US announced tariffs on Dollars 250 billion worth of Chinese goods, while China countered with its own.

The United States and China had been engaged in a trade war over the past year after United States President Donald Trump accused Beijing of indulging in unfair trade practices.

Tesla broke ground this week in Shanghai on its first factory outside the U.S. Musk said production of its Model 3 would start late this year.

ANALYST'S TAKE: "While there was agreement on less thorny issues such as agriculture and energy, USA demands for verification and enforceable targets on intellectual property rights, transfer of technologies and non-tariff barriers may not be that easily addressed", DBS Group Research strategists Eugene Leow and Neel Gopalakrishnan said in a commentary.

As the scheduled trade talks extend to a third day, speculations are rife over China's intentions on coming down to an agreeable trade deal with the Trump administration. In recent weeks, China has showed some signs of flexibility or acceding to the American demands.

While Chinese goods going to the USA initially held up in the face of higher tariffs due to so-called front-loading, their value slumped in the final quarter of 2018, according to the latest available data.

Beijing has offered concessions on investment regulations and stepping up purchases of American soybeans, natural gas and other exports, seeking to defuse complaints from the USA and other trading partners.

In addition to the large trade deficit, the U.S. has long complained about such structural issues.

The truce came after the two sides imposed import duties on more than $300 billion of each other's goods.

As the trade talks wound down, China's top economic official, Premier Li Keqiang, met with CEO Elon Musk of electric auto brand Tesla Inc. He added: "It's been a good one for us".

Companies in both the United States and China are feeling the pain from the effects of the U.S.

Other reports by Click Lancashire

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