Posts Tagged ‘China’s trade surplus with the US’

Trump’s trade war has seen US imports of Chinese goods hit with the initial tariffs fall by 30%

November 9, 2018

Research from UBS shows President Trump’s tariffs on Chinese goods are having a material effect on US-China trade.

China shipping containers

The analysts reviewed US import data for $34 billion of products that fell within the first tranche of US tariffs on July 6.


And the decline has been “sharp and unambiguous”:

ubs_a copylargeCensus/UBS

“The modest uptick in September data, however, gives us hope that the adjustment period for these imports has now drawn to an end,” UBS said.

It was a similar story for products in the second tranche of tariffs on an additional $US16 billion worth of goods, which was implemented on August 23.

US imports of those products fell by 32% in August and September. However, the figure is overstated because imports of those items jumped in July.

“The fall relative to the May levels is a more modest but still large 20%,” UBS said.

The results from the first round of tariffs raise an obvious question: what will happen to imports on the $US200 billion of additional tariffs that were implemented on September 24?.

Because of the more recent time frame, UBS said its too early to calculate what the negative effects are.

Read more: Goldman Sachs just named a new crop of partners. Here’s a list of the bankers who joined one of the most exclusive clubs on Wall Street

The analysts noted that imports of the goods in those tranches “accelerated sharply” in the three months prior to implementation.

However, not all of that would can be attributed to customers stocking up before the tariffs came into effect. For one thing, imports were already picking up in July — before the third tranche was announced.

The three-month increase was driven by US imports of tech devices — largely circuit boards and disk drives.

Looking at the key tech products, UBS said it’s difficult to conclude whether the increase was due to a pre-tariff surge, or merely an extension of the broader trend growth for those products seen in recent years.

“Nonetheless, we do think that there is a positive boost pre-tariff, but that that lift is small.”

Chinese trade data due out later today will give an update on China’s trade balance with the US.

Despite the effects of the ongoing trade war, China’s trade surplus with the US has remained at record highs so far this year.


China switches strategy to deal with Trump tariffs — China wooing support from other nations

July 12, 2018

Beijing rips up its playbook by wooing support from other nations

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© Bloomberg

By Lucy Hornby in Beijing

China is taking an unusual approach with its response to the escalating trade battle with the US, ripping up the playbook it has relied on in other economic disputes as it seeks allies in Europe, Asia and within America itself.

Previous trade fights with Japan, France, the Philippines and most recently South Korea have been accompanied by a ramping up of hostility in China’s state-run media and bruising “boycott diplomacy” against those nations’ corporations.

This time, however, China has cautiously parried the US measures as it seeks instead to present itself as an attractive investment destination, while President Donald Trump’s administration pressed ahead with tariffs on $34bn in goods. The US this week released a fresh list of $200bn in goods that could face tariffs in two months’ time.

China’s calm response stems from the importance of its bilateral trade and investment from the US — the two countries’ economies are entwined. “The US is larger-scale, and a different kind of economic power than Japan or Korea. That makes this quite unique,” said Max Zenglein, senior economist at the Merics Institute in Berlin. China’s trade surplus with the US limits its ability to impose tit-for-tat tariffs, he noted.

“When dealing with the US it is clear they [China] are more vulnerable and so that forces them to take a different approach.”

With this in mind, Chinese trade negotiators, led by Liu He, have focused on finding potential allies, including pro-business officials in Washington, who they hope can be won over with investment concessions.

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Liu He

Instead of targeting American companies directly — as it did with Korean supermarket chain Lotte — Beijing has offered better market access to their competitors. Chinese officials are pushing European and Japanese corporations to take advantage of a raft of long-promised reforms rolled out earlier this year, in a reminder to US companies that Beijing can divvy up the vast Chinese market as it pleases.

An offer of $15m in aid to the Palestinians was made at a recent summit in an attempt to woo Arab leaders. Even relations with Japan and South Korea have improved. Beijing has refused to link the trade dispute with Mr Trump’s nuclear negotiations with North Korean leader Kim Jong Un.

“The challenge the Chinese are going to have is there is not much more room to respond in terms of tariffs,” said Kellie Meiman, trade expert at McLarty Associates in Washington.

Beijing does not want to scare off foreign investors or run the risk of reducing much-needed investment and loans. In the wake of the attacks on Japanese companies in 2012 and on South Korean companies last year, both nations adopted a strategy of deliberately diversifying their manufacturing bases away from China.

Even the dollar-for-dollar retaliatory tariffs China has levied carry some risk for Beijing, as they could have the effect of fuelling Chinese inflation.

“On the surface, China is trying to strike a blow at the US; in fact, the final result will be a blow to China. The three things we chose [to impose tariffs on], soyabeans, aeroplanes and chips, are the products we need the most,” said Shen Dingli, an international relations expert at Fudan University in Shanghai.

In public, Beijing has downplayed the potential impact of the tariffs. Trade war news has been relegated to the inside pages of the official People’s Daily for several days running. The reliably nationalistic Global Times has kept a restrained tone.

“We will hold public opinion at a good level without escalating it . . . and strike accurately and carefully, splitting apart different domestic groups in the US,” read a leaked memo giving instructions to the Chinese media on how to cover the trade tensions. It was published by the China Digital Times, a website that monitors propaganda orders and the Chinese media.

The intent may be to reassure the public that China can face down the threat. But it also reflects the broad exposure of the Chinese public to American culture and social values, that makes it much harder to mount a full-throated attack. At least 2m Chinese have studied in the US over the past 12 years alone. Millions more have emigrated or work for American companies and joint ventures in China. Strong Chinese nationalism is always a dangerous tool for the ruling Communist party to whip up.

“The US really has a big impact on China. The impact is 10 times bigger than that of Korea. The US influences Chinese ideology, China’s economy and it also affects lots of people’s personal interests. So lots of Chinese would not like to speak out” against the US, said Sima Pingbang, a blogger known for his leftist and nationalist views.

Indeed, Chinese “netizens” even cheered for a ship carrying soyabeans from the US, as it raced to get to a Chinese port before the tariffs kicked in.

Some Chinese officials, confident in Beijing’s strength, are impatient to strike a harder blow. For now, however, sang-froid has prevailed as the trade war is portrayed as an economic issue, not a political fight or an emotional national threat.

Additional reporting by Archie Zhang and Sherry Fei Ju in Beijing


China Draws Up a Shopping List of American Goods to Avoid Trade War

May 10, 2018

Beijing and Washington are both looking to reduce trade deficit

U.S. Trade Representative Robert Lighthizer was part of a delegation sent to Beijing last week.
U.S. Trade Representative Robert Lighthizer was part of a delegation sent to Beijing last week. PHOTO: JASON LEE/REUTERS

China likely will offer to import more U.S. goods during negotiations in Washington next week as the two sides see one of the best ways to avert an all-out trade war is for Beijing to buy American.

Sufficient progress was made when a senior U.S. delegation went to Beijing last week, say the two sides, that China is dispatching its chief economic envoy, Liu He, to Washington in the days ahead, though China hasn’t confirmed his arrival date. Mr. Liu is expected to come with a shopping list of sorts, specific ideas for purchases designed to narrow the two country’s vast trade imbalance.

Chinese officials expressed willingness to work with the U.S. to reduce the trade gap during last week’s talks, but they didn’t agree to the U.S. demand that China cut its trade advantage by $200 billion by the end of 2020. Last year the U.S. ran a $375 billion merchandise trade deficit with China and a $337 billion shortfall when counting services.

Settling the dispute is taking on a degree of urgency as the tensions between Washington and Beijing are already affecting trade flows between the two nations. Since the U.S. first threatened tariffs on Chinese imports in January, U.S. exports have faced growing hurdles when entering the Chinese market: automobiles are being held up at Chinese customs, pork exports are facing tough new inspections, and farm goods, including soybeans and other farm products, are threatened to be hit with retaliatory tariffs.

Reducing the trade imbalance is an area both nations have chosen as a priority. President Donald Trump associates the deficit with lost U.S. jobs. Beijing officials say they need to cut China’s reliance on exports as a way to build a modern economy focused more on consumption.

Trump last week sent his senior economic team—including Treasury Secretary  Steven Mnuchin  and U.S. Trade Representative  Robert Lighthizer —to try to make progress. As the U.S. officials headed to Beijing, they issued an eight-point plan on trade and investment, which largely amounts to a request that China change the way it manages its economy, along with the demands to reduce the deficit.

Right before the Beijing meetings, both sides put forward a number of far-reaching proposals that would require significant changes in economic policy to address the trade imbalance. Those discussions didn’t go much beyond each side presenting their proposals. The U.S., for instance, asked China to stop providing subsidies and other assistance for advanced technologies—a request Beijing views as unacceptable. The Chinese side demanded that the U.S. ease national security reviews of Chinese investments, a nonstarter for Washington.

U.S. negotiators went into the first day of talks with low expectations, thinking they would walk out if the talks didn’t go well, according to people familiar with the matter. But the Chinese negotiators led by Mr. Liu told them that Beijing takes U.S. concerns seriously and recognizes the deficit is a priority for Washington. The goodwill made U.S. officials “feel very good,” one of the people said.

On the second day of talks, the focus was on how to bring down the bilateral deficit. The Chinese side didn’t agree to the targets set by the Americans. The U.S. dismissed a Chinese proposal to lift export controls on U.S. technology goods and services. Still, both parties agreed to keep talking.

It is far from clear whether even a good-faith effort by China to reduce the deficit would be enough to satisfy the Trump negotiating team, which is sharply divided by internal rivalries. Mr. Mnuchin, for instance, has been leading talks on deficit reduction. Some in industry and government worry that he is too ready to cut a deal as a way to calm markets, say individuals briefed on the talks. Mr. Lighthizer has been leading negotiations on more fundamental changes.

Liu He, China’s chief economic envoy, is coming to Washington.
Liu He, China’s chief economic envoy, is coming to Washington. PHOTO: LINTAO ZHANG/GETTY IMAGES

During several sessions, Messrs. Liu and Mr. Mnuchin met without others, leading to concerns among some industry groups that Mr. Mnuchin was trying to freelance a deal that would leave the U.S.-China trade relationship unchanged.

The administration says that isn’t the case and in two-on-two meetings Mr. Lighthizer was always added. “The U.S. delegation was unified and coordinated in meeting with Chinese counterparts, and Secretary Mnuchin and Ambassador Lighthizer continue to work very closely together on all relevant issues,” said Emily Davis, a spokesman for Mr. Lighthizer.

Individuals following the talks said the deficit talks were the main positive outcomes of last week’s negotiations in Beijing. It isn’t clear exactly what purchases the Chinese will target to right the trade imbalance, but such a plan would invariably include commodities such as natural gas or manufactured goods like autos and airplanes. The plan would also involve expanding purchases of U.S. services, from insurance to cloud computing.

Economists say a goal to simply reduce the bilateral trade deficit goal isn’t realistic because deficits reflect broad economic issues—specifically the difference between national savings and investment. Using trade policies to hit a target would require “massive intervention” on China’s part—moving Beijing further away from market-directed policies—as the government essentially would have to tell companies what to buy abroad and where to buy it from, said Eswar Prasad, a Cornell University professor of international trade.

Still, the U.S. figures requiring a trade deficit reduction would mean more U.S. exports—a political win for Mr. Trump—as well as big changes in Chinese economic policies. That is because the U.S. merchandise trade deficit is so vast, China couldn’t cut it much simply by redirecting purchases to the U.S. Instead, U.S. negotiators figure, China would be forced to make the kinds of fundamental changes it seeks.

Those include slashing tariffs on cars and other goods, eliminating joint venture requirements, ending prohibitions on U.S. movies and other service imports and easing the way for U.S. cloud computing and other data providers to do more business in China. The U.S. plan specifically encourages China to increase purchases of services as well as goods.

Despite the encouraging words by the leaders, trade relations between the two nations remain tense and, by some measures, are actually worsening. Chinese customs authorities have been “slow walking” some Ford imports for a few weeks, said a person familiar with the matter.

The trade fight has also cut into American farms’ sales to China, one of the world’s biggest markets. In April, China announced tariffs on some U.S. agricultural goods and threatened to target others, in retaliation for U.S. tariffs on Chinese steel and aluminum exports.

Now, the U.S. pork industry faces stricter scrutiny over meat exported to China. Since late April, Chinese customs officials have inspected all shipments of pork from the U.S. and boosted sampling rates to 20% of those shipments, according to the U.S. Department of Agriculture. For U.S. pork exporters already dealing with tariffs on their product that China implemented in April, the new steps “will likely add additional costs to the importing process,” USDA officials said.

It isn’t clear Mr. Trump would approve a deal that doesn’t involve deep changes in the Chinese system. When Commerce Secretary Wilbur Ross last year brought back a deal that amounted to increased Chinese purchases, Mr. Trump rejected the plan, canceled further talks and stripped Mr. Ross of his lead role on China. One big difference between then and now: the U.S. is close to a deal on North Korea nuclear weapons and needs Beijing’s help.

China is negotiating under an approaching deadline for additional tariffs as part of a U.S. allegation that China forces U.S. companies to transfer their technology to Chines partners. A comment period on a U.S. proposal to levy tariffs on $50 billion in Chines goods ends May 22, the same date that the U.S. Treasury is scheduled to propose stiff restrictions on Chinese investment in U.S. high technology.

The U.S. is also threatening tariffs on another $100 billion on Chinese goods as part of the same dispute. China has vowed to retaliate in kind. A failure to reach a deal would raise the chances that the tariffs would go into effect, potentially disrupting global supply chain along the way.

Write to Lingling Wei at and Bob Davis at

Appeared in the May 10, 2018, print edition as ‘China Plans Offer to Buy More From U.S..’

Why China may pay a high price for cutting the trade gap with the US

May 10, 2018

A key pillar of China’s economic boom is crumbling away, a change that analysts believe could make it harder for Beijing to accede to America’s demands to slash the trade gap between the two countries.

The first current account deficit in 17 years brings the risks of cutting America’s trade deficit into sharper focus

South China Morning Post
Thursday, 10 May, 2018, 9:21am

By Frank Tang and Amanda Lee

China’s current account for the first three months of the year recorded the first quarterly deficit in 17 years and the country is now facing the possibility that it will see its first full-year deficit since 1994 – a process that could be accelerated by Washington’s demands.

Customs figures for the first four months of the year show that China’s trade surplus with the US exceeded the country’s overall surplus: in other words, China would be in deficit without its gains from the US.

Economists have warned that China may see unpredictable changes to its exchange rates and capital flows if its long-standing surplus in trade turned into a deficit – a scenario that would become a reality if Washington persuades Beijing to narrow the trade gap by US$200 billion.

A Chinese delegation will visit the United States next week to continue the discussions on trade, and Zhou Hao, senior emerging markets economist with Commerzbank in Singapore, said Beijing would try its best to avoid a dramatic fall in its surplus.

“A current account deficit is not a good thing for emerging markets, because it means a demand for external funding and in some circumstances could be accompanied with many [economic and political] conditions,” he said.

The government has previously insisted that China is not deliberately pursuing a trade surplus and the current situation reflects its role in the global value chain – if China imports components and assembles them and then re-exports the finished products, it will result in a surplus.

In reality, the so-called twin surplus in both its current and capital accounts has allowed Beijing to accumulate the world’s largest foreign exchange stockpile – it peaked in the middle of 2014 at US$4 trillion – and to print money at home to help growth without causing a sharp depreciation in its currency.

But the situation has started to change as Chinese people buy more foreign products and spend more abroad while speculative capital has retreated from China.

China’s foreign exchange reserves dropped to a five-month low of US$3.125 trillion in April, despite Beijing’s efforts to encourage inflows and to curb outflows.

 Washington has demanded that China cuts the trade gap with America by US$200 billion. Photo: Bloomberg

China’s current account surplus reached 9.9 per cent of its gross domestic product in 2007, but dropped to 1.3 per cent in 2017, and according to Standard Chartered, the ratio could fall to 1 per cent this year and 0.5 per cent in 2019.

Of course, you can say China can buy more planes or semiconductors, but they [the US] might not want to sell

In cargo trade, China had a US$76.8 billion surplus in the first four months of the year, with its surplus with the US reaching US$80.4 billion, according to China’s customs administration.

Huang Yiping, a professor at the National School of Development of Peking University, told the South China Morning Post on the sidelines of an investor conference in Beijing on Tuesday that there were no short-term fixes to the trade imbalance between China and America, which the US says stood at US$375 billion last year.

“Of course, you can say China can buy more planes or semiconductors, but they [the US] might not want to sell,” Huang said.

Shen Jianguang, chief economist at Mizuho Securities Asia, warned that the trade talks may fail to address structural problems.

He gave the example of liquefied natural gas sales, saying China may import less from the Middle East if it was forced to buy more from the US to cut the trade deficit.

U. S. demands make China trade resolution tougher

May 5, 2018


Chicago Sun-Times
May 5, 2018

BEIJING — A list of hard- line demands that the Trump administration handed China this week could make it evenmore difficult to resolve a trade conflict between the world’s two largest economies.

That’s the view of trade analysts who say the U. S. insistence that Beijing shrink America’s gaping trade deficit with China by $ 200 billion by the end of 2020, among other demands, are more likely to raise tensions.

A U. S. official confirmed the authenticity of a document outlining U. S. priorities that was presented to China ahead of two days of trade talks that ended Friday. The official spoke on condition of anonymity.

In Washington on Friday, President Donald Trump said, “We have to bring fairness in trade between the U. S. 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.

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The U. S. document is described, in an introductory disclaimer, as being provided to the Chinese ahead of the visit to Beijing by the U. S. officials. It included demands that China immediately stop providing subsidies to industries listed in a key industrial plan. China must end some of its policies related to technology transfers, a key source of tension underlying the dispute, the list also says.

The U. S. wants China not to retaliate against U. S. measures currently being pursued against it. For instance, the U. S. says China should agree not to target U. S. farmers or agricultural products and “not oppose, challenge or otherwise retaliate” when the U. S. moves to restrict Chinese investment in the U. S. in sensitive sectors.

American analysts were struck by the aggressiveness of the Trump team’s demands. Eswar Prasad, a professor of trade policy at Cornell University, said the hard- nosed approach “makes it harder to envision a path toward a negotiated settlement.”

Prasad said the Chinese are open to negotiations on opening their market wider and doing a better job of protecting intellectual property. “Beijing is clearly in no mood, however, to meet the U.S. team’s expectation of capitulation in the face of threats of tariffs and other trade sanctions,” he said.

Wendy Cutler, a former U.S. trade negotiator who specialized in Asia, said it was encouraging to see the two countries talking and trading proposals. But she said the “kitchen sink” U.S. demands look unrealistic.

“If the U.S. is serious and wants all of this, it’s hard to see a constructive path forward,” said Cutler, now vice president at the Asia Society Policy Institute.

Analysts said the Chinese were likely to view the confrontational posture struck by the U.S. as unreasonable and akin to bullying, potentially making it difficult to tone down friction over such issues.

Yu Miaojie, a professor at Peking University’s National School of Development, described some of the demands as “like lions opening their mouths.”

“When it comes to negotiations, both sides can provide a list of requests and we will seek common ground while reserving our differences,” Yu said. “If one side provides a list with unreasonable requests, the Chinese government is unable to accept it.”

“China won’t be frightened by this kind of threat,” wrote Hu Xijin, the chief editor of the Global Times, a nationalistic tabloid affiliated with the Communist Party mouthpiece, in a post on the Sina Weibo website. Hu said he believed China would engage in talks seriously but also be fully prepared for them to fail.

Still, the list was welcomed by a U.S. business group which has lobbied the Trump administration for greater clarity on what it wanted China to do. Some groups had complained the administration was sending mixed messages.

“We’ve been saying that the Trump administration needs to define success and what specific outcomes it is seeking,” said Jake Parker, vice president for China of the U.S.-China Business Council. The list submitted to China helps “lead to a solution and avoid tariffs and other sanctions,” he said.

The two sides “reached consensus in some areas,” the official Xinhua News Agency said.

“Both sides realized that there are still relatively big differences over some issues and that they need to continue to work hard to make more improvements,” the report said.

There was no immediate comment from the U.S. delegation. A motorcade was seen leaving the U.S. Embassy in Beijing on Friday afternoon and the group departed China later in the day.

The list of U.S. demands was first reported by The Wall Street Journal on Friday.

The dispute will be tough to resolve because the fundamental issue is that the U.S. wants to stop China from moving up the so-called value chain as it transforms into an advanced economy, said Louis Kuijs, head Asia economist at Oxford Economics. But “there’s no way that China’s going to change its strategy on that.”

Kuijs said the ball is now in the U.S. court on deciding whether the talks were fruitful and merit more discussion or that they’re stalled and Washington needs to take more serious measures targeting China.

This is “much more than just a trade dispute,” Kuijs said. “This is very much about economic strategy and the U.S. coming to grips with a big country running its economy in a way that the U.S. is uncomfortable with, and becoming successful, and starting to threaten U.S. dominance.”


Wiseman reported from Washington. Associated Press reporters Kelvin Chan in Hong Kong, Martin Crutsinger in Washington and Christopher Bodeen and researcher Yu Bing in Beijing contributed to this report.


China state media sees positives in trade talks with U.S.

May 5, 2018

Chinese state media struck an optimistic note on trade talks between Chinese and U.S. officials after U.S. President Donald Trump threatened to impose tariffs on up to $150 billion in Chinese goods over allegations of intellectual property theft.

The English-language China Daily saw a “positive development” in the two days of talks in an agreement to establish a mechanism to keep the dialogue open, despite “big differences”, as part an effort to resolve trade disputes.

The newspaper said the biggest achievement was “the constructive agreement between Beijing and Washington to keep discussing contentious trade issues, instead of continuing the two-way barrage of tariffs, which pretty much brought the two countries to the brink of a trade war”.

The People’s Daily said the talks “laid solid foundation for further talks on trade and economic cooperation, and for ultimately achieving benefits (to both countries) and win-win results”.

China’s state-run Xinhua news agency described the talks as “constructive, candid and efficient” but with disagreements that remain “relatively big”.

People familiar with the talks said on Friday the Trump administration had drawn a hard line, demanding a $200 billion cut in the Chinese trade surplus with the United States, sharply lower tariffs and advanced technology subsidies.

The lengthy list of demands was presented to Beijing before the start of talks on Thursday and Friday to try to avert a damaging trade war between the world’s two largest economies.

A White House statement issued on Friday said the U.S. delegation, led by Treasury Secretary Steven Mnuchin, “held frank discussions with Chinese officials on rebalancing the United States–China bilateral economic relationship, improving China’s protection of intellectual property, and identifying policies that unfairly enforce technology transfers”.

The statement gave no indication that Trump would back off on his threat to impose tariffs.

Capital Economics, a private economic research consultancy based in London, said in a research note that demands made by the United States were so “unrealistically high” that an agreement was unlikely this week.

“Unless the Trump administration settles for a lot less

than initially demanded, tensions between the two countries will continue for some time,” it said.

But “both the U.S. and China have shown some willingness to compromise”, it said. “Given that the U.S. entered into the negotiations with a list of unrealistically high demands… it is reassuring that the talks didn’t break down altogether.”

The U.S. delegation was returning to Washington to brief Trump and “seek his decision on next steps”, the White House said, adding that the administration had “consensus” for “immediate attention” to change the U.S-China trade and investment relationship.

Trump said he would meet the delegation on Saturday.

“We will be meeting tomorrow to determine the results, but it is hard for China in that they have become very spoiled with U.S. trade wins!” he said in a Twitter post late on Friday.

Reporting By Norihiko Shirouzu and Pei Li; Editing by Nick Macfie



U.S.-China Trade Talks End With Strong Demands, but Few Signs of a Deal — Trump administration has no intention of backing down

May 5, 2018

Senior Chinese and American officials concluded two days of negotiations on Friday with no deal and no date set for further talks, as the United States stepped up its demands for Chinese concessions to avert a potential trade war.


The United States delegation in Beijing for trade talks on Friday included Treasury Secretary Steven Mnuchin, center left, and Commerce Secretary Wilbur Ross, center right.  CreditNicolas Asfouri/Agence France-Presse — Getty Images

The American negotiating team, which included Treasury Secretary Steven Mnuchin and the United States trade representative, Robert E. Lighthizer, headed for the airport after the talks and did not release a statement. But a list of demands that the group took into the meeting called for reducing the United States’ trade gap with China by $200 billion over the next two years and a halt on Chinese subsidies for advanced manufacturing sectors.

The demands, which spread on Chinese social media and were confirmed by a person close to the negotiations, suggested that both sides hardened their positions this week despite the two days of talks. Senior Chinese officials and their advisers were also sending a deliberate message to the West that the days of Beijing being conciliatory were over, and that China was staking out its own position in the negotiations.

The person close to the negotiations insisted on anonymity because of diplomatic sensitivities.

The extensive list of United States trade demands was unexpectedly sweeping, and showed that the Trump administration has no intention of backing down despite Beijing’s assertive stance in the last few days. “The list reads like the terms for a surrender rather than a basis for negotiation,” said Eswar Prasad, an economics professor at Cornell University.

Read the rest:



Trump says China ‘spoiled’ by trade wins over US

May 5, 2018

China is “very spoiled” by trade wins over America, US President Donald Trump said late Friday, as a top business delegation headed back to America after high-stakes talks with Beijing.

© AFP | “Our high level delegation is on the way back from China where they had long meetings with Chinese leaders and business representatives,” Trump wrote in a tweet

The two days of talks were aimed at forestalling momentum towards a looming conflict between the world’s two largest economies, with both sides prepared to pull the trigger on tariffs that could affect trade in billions of dollars of goods.

“Our high level delegation is on the way back from China where they had long meetings with Chinese leaders and business representatives,” Trump wrote in a tweet.

“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,” he added.

The American president has accused China of unfair trade practices that have driven up the US goods deficit with the Asian giant. Washington has also alleged “theft” of American intellectual property by China.

The discussions promised a potential off-ramp for the trade conflict. Trump has threatened to levy new tariffs on $150 billion of Chinese imports while Beijing shot back with a list of $50 billion in targeted US goods.

“Both sides recognise there are still big differences on some issues and that they need to continue to step up their work to make progress,” China said in a statement released by the official Xinhua state news agency.

“The two sides exchanged views on expanding US exports to China, trade in services, bilateral investment, protection of intellectual property rights, resolution of tariffs and non-tariff measures.”

It added that they had reached “a consensus in some areas”, without elaborating. The agency said both sides had agreed to establish a “working mechanism” to continue talks.

Beijing has promised reform on several fronts in recent months — including lifting foreign ownership restrictions for automakers and allowing foreign investors to take controlling stakes in financial firms.

But a list of US demands presented at the talks in Beijing showed these steps fall far short of expectations in Washington.

The demands included cutting China’s trade surplus with the US by at least $200 billion by the end of 2020, lowering all tariffs to match US levels, eliminating technology transfer practices, and cutting off state support for some Chinese industries, according to Bloomberg News.

The White House called the discussions “frank” while making no mention of continuing the negotiations.

“There is consensus within the Administration that immediate attention is needed to bring changes to United States?China trade and investment relationship,” a White House statement said.