China-U.S. trade talks restart as warship clouds negotiations

Tuesday, 08 Jan, 2019

No agreement was expected, but any progress on ending a dispute that has resulted in both sides imposing tariffs on billions of dollars' of each other's exports would be welcomed.

Since March, the US has slapped tariffs on $250 billion worth of Chinese goods, while China has placed a series of retaliatory tariffs on USA goods totaling $110 billion.

China has the "good faith" to work with the United States to resolve trade frictions, the Foreign Ministry said on Monday as officials of the world's two largest economies resumed talks in a bid to end their trade dispute. Over the weekend, President Donald Trump told reporters at the White House that negotiations were going "very well". "I don't think it will proceed that fast". There are concerns that US growth, 3.4 percent in the third quarter, could also be slowing even as the country's unemployment rate remains almost at a five-decade low.

As the talks began Monday at the Chinese Commerce Ministry, Beijing complained about a USA warship in what it said were Chinese waters, but it was unclear if that would disrupt the proceedings. Mnuchin told Bloomberg News in December that the USA was "confirming the logistics of several meetings" that could be held with China during the forum.

"As for whether the Chinese economy is good or not, I have already explained this".

The president also is likely to hold talks with Chinese Vice President Wang Qishan at the World Economic Forum later this month in Davos, Switzerland, reported The South China Morning Post.

If there is no deal by March 1, Washington has said it will go ahead with a sharp hike in tariffs on Chinese goods originally set for January 1.

Chinese officials have said new measures will combat intellectual property theft, indicating that Beijing may make major changes to its "Made in China 2025" initiative, which calls for state-led creation of champions in robotics, artificial intelligence and other fields.

A United States delegation led by Deputy Trade Representative Jeffrey Gerrish arrived in the Chinese capital to start the two-day vice-ministerial level talks over a trade dispute since the beginning of 2018.

"It certainly has hurt the Chinese economy", Ross told CNBC.

Without a resolution, punitive U.S. duty rates on US$200 billion in Chinese goods are due to rise to 25 per cent from 10 per cent on March 2.

Speaking at a conference on China organized by the Swiss bank UBS, former Goldman executive Fred Hu said that China not only could not but should not dismantle its economic system in favor of a market-based economy, according to Bloomberg. Both Taiwan and Vietnam also claim the Paracel Islands, and the USA has contended that its ships passed through only global waters, which Chinese officials refuted.

The protracted trade war between the top two economies of the world is seen by many as a battle for global leadership.

The reason? Prasad said the Trump administration views Treasury Secretary Steven Mnuchin as being too soft against China.