Sunday, 16 June, 2019

China-US trade talks have laid foundation for a deal, ministry says

What hope for markets in the US-China trade talks? US-China Trade Talks Wrap Up After Extending To Third Day
Ginger Lawrence | 10 January, 2019, 20:28

"It's been a good one for us", Ted McKinney, US Under Secretary for Trade and Foreign Agricultural Affairs, said after the talks concluded.

While Chinese goods going to the US 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. For sales going the other direction, the crunch was more immediate.

Productive talks could be a boon to the economies of both countries, which spent most of 2018 mired in a trade war that imposed hundreds of billions of dollars in tariffs on each other's goods.

China and the U.S. wrapped up three days of trade talks and are reportedly coordinating how to characterize the results publicly as officials from both nations expressed optimism that progress had been made.

They were the first face-to-face meetings since Chinese President Xi Jinping and US President Donald Trump brokered a 90-day ceasefire in trade hostilities in December. But the shutdown may yet prevent Trump's appearance, according to a report in the Wall Street Journal. Prior to the meeting, China made a number of concessions to United States demands including temporarily cutting punitive tariffs on US-made cars, resuming soybean purchases, promising to open up its markets for more foreign investment, and drafting a law to prevent forced technology transfers. "Uncertainty is bad for business".

No details were immediately announced, but Asian stock markets rose after talks planned for two days were extended to three. USA officials appear to want to maintain the pressure of tariffs, the official said.

USA and Chinese envoys extended trade talks into a third day Wednesday after President Donald Trump said negotiations aimed at ending a tariff war were "going very well!".

The US delegation, led by Deputy Trade Representative Jeffrey Gerrish, had been scheduled to end its visit on Tuesday.

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That would not only squeeze corporate profitability at home, but also put pressure on global price gains, as export prices usually follow those at factory gate. There are concerns the USA growth rate, 3.4 percent in the third quarter, is also slowing even as the country's unemployment rate remains almost at a five-decade low.

A reduction in Chinese imports of US goods came quickly after the retaliatory imposition of tariffs, the data show.

People familiar with the U.S.

If no deal is reached by March 2, US tariffs on $200 billion Chinese goods will rise from 10 percent to 25 percent. Even if the current truce is made permanent and the tariffs are eventually rolled back, the damage to many companies may already be done.

The Trump administration is pushing for a way to make sure China delivers on its commitments in any deal. Those include subsidies and other favors for high-tech and state-owned industry, rules on technology licensing and preferential treatment of domestic suppliers in government procurement.

The talk has enhanced mutual understanding and laid a foundation for addressing each other's concerns, it said.

When asked about progress in those areas on Thursday, China's commerce ministry spokesman Gao Feng said that structural issues were a focus of the talks.

Investors are hoping that this really does signal progress. If a "REAL" deal with China is possible, the US will "get it done", Trump tweeted shortly after his dinner with Jinping last month.