USA and China seek deal to prevent trade-war escalation

Monday, 18 Feb, 2019

This comes ahead of trade talks between the two economic powerhouses which are set to resume in Washington this week after high-level discussions in Beijing last week. But they also believe China's goal is to make enough progress to persuade Mr. Trump to extend his deadline. Factories rush to fill orders and then close for up to two weeks. But business groups and foreign governments point to rules they say compel companies to disclose trade secrets or share technology with state-owned partners.

In December he postponed plans to sharply hike tariffs on $200 billion of Chinese imports to allow more time for negotiation.

USA duties on $200 billion in imports from China are set to rise to 25 percent from 10 percent if no deal is reached by March 1 to address US demands that China curb forced technology transfers and better enforce intellectual property rights.

But President Trump recently hinted that this deadline could be extended if they are making good progress in negotiations with China. Beijing has offered to ramp up its purchases from the US massively over the next six years in order to even the scales. Both sides have expressed optimism without releasing details. The stakes are rising as global economic growth cools.

When asked Thursday if there would be an extension, Kudlow said, "No such decision has been made so far".

But economist Cui Fan of the University of International Business and Economics in Beijing cautioned China may not give ground if the USA wants to discuss state subsidies beyond the remit of the World Trade Organization agreement.

Chinese officials reject complaints that foreign companies are required to hand over technology. "They're hard at it", Kudlow said of the talks.

Chinese exports to the United States have been squeezed by President Donald Trump's tariff hike in a dispute over Beijing's technology ambitions. "They feel that it is humiliating for China", he said.

But multiple reports indicated little progress was made in the Chinese capital on thorny issues such as U.S. demands that Beijing stop requiring forced technology transfers by foreign firms as a condition of doing business in its market, and reduce subsidies that favour domestic companies.

U.S. President Donald Trump and Chinese President Xi Jinping, seen in this 2017 photo, are on opposite sides of a high-stakes trade fight. It will be his second meeting with Lighthizer following last month's talks in Washington.

That the feel-good atmosphere that has prevailed since the January discussions in Washington has been maintained by this round of talks was evident as the negotiations are to continue in the United States capital next week. Deputy-level officials started talks on Monday. The analysts surveyed by Reuters projected China's trade surplus to have narrowed to $33.5 billion from $57.06 billion in December.

Net exports dragged on China's growth by 8.6 percent a year ago, Reuters calculations showed.

This year's Munich Security Conference topics include the "great power competition" between the United States, China and Russian Federation.

Washington, Europe, Japan and other governments say those plans violate Beijing's market-opening obligations.

"The realistic approach is that the deadline gets extended and the negotiations possibly go into the end of this year, I would suspect", former Assistant Trade representative for China Jeff Moon tells VOA.

"One possible explanation for January's upbeat export data could be some re-arrangement of regional supply chains on the back of the ongoing China-US trade dispute", said Betty Wang, an economist at ANZ bank.