US, China Negotiators in ‘Constructive’ Discussions on Trade Deal

Published November 18th, 2019 - 09:30 GMT
US, China Negotiators in ‘Constructive’ Discussions on Trade Deal
One of the major stumbling blocks is the amount of US agricultural goods that China will agree to buy as part of the interim deal. (Shutterstock)
Highlights
The long-running trade war between Washington and Beijing has weighed on the global economy and spooked markets

Top Chinese and US trade negotiators held “constructive” discussions over the phone on a preliminary trade deal between the two countries, China’s commerce ministry announced in a statement on Sunday.


The long-running trade war between Washington and Beijing has weighed on the global economy and spooked markets, with the two sides imposing punitive tariffs on hundreds of billions of dollars in two-way trade.

US President Trump announced a “phase one” trade deal last month which has yet to be signed.

Vice Premier Liu He spoke with US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin on Saturday, and had “constructive discussion on each side’s core concerns regarding the phase-one agreement”, the Chinese commerce ministry said.

The two sides will “continue to maintain close communication”, it added, without providing further details.

Since October, differences between Washington and Beijing over whether, when and by how much to reduce tariffs on each other’s goods have spilled out into the open.

Trump this month denied the Chinese commerce ministry’s claim that the two sides had agreed to roll back existing tariffs as part of the deal, details of which have not been released.

Trump had planned to sign a pact with China’s President Xi Jinping on the sidelines of the now-canceled summit in Chile this month.

Since that cancellation, no other meeting between the two has been announced.

A shared refusal to budge on key issues means China and the United States still have work to do to reach an interim trade agreement, even as the deadline for the next round of US tariffs draws ever closer, observers say.

While Beijing is sticking firm to its demand that a deal must start with the removal of America’s punitive tariffs on its products, US Commerce Secretary Wilbur Ross said in an interview with Fox Business Network on Friday that US President Donald Trump had not yet agreed to such a move.

“This shows that China and the US are still deeply divided,” said Luo Zhiheng, chief macro researcher at Evergrande Research Institute, a think tank affiliated to the Chinese property developer that shares its name.

The two countries did not appear to be on the “same page” over the withdrawal of tariffs, he said.

The cautionary note came despite Beijing and Washington sending positive signals that consensus on a phase one deal focused on less controversial elements of the dispute was close.

But analysts say there are still difficulties in reaching a deal before December 15, the date on which the US is set to impose additional 15 per cent tariffs on US$156 billion worth of Chinese products, including video game consoles and computer monitors.

One of the major stumbling blocks is the amount of US agricultural goods that China will agree to buy as part of the interim deal.

Last month, Trump said it had agreed to purchases of between US$40 billion and US$50 billion, despite spending only US$24 billion on such goods in 2017.

Ross said in the Fox interview that China “can certainly afford to buy” such an amount but questioned if it was willing to commit to doing so.


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