US, China end talks on tariff battle with no word on outcome
- Author: Eleanor Harrison Jan 11, 2019,
Jan 11, 2019, 0:57
China has repeatedly played down complaints about intellectual property abuses, and has rejected accusations that foreign companies face forced technology transfer.
The three-day talks in Beijing that wrapped up on Wednesday were the first face-to-face negotiations since U.S. President Donald Trump and his Chinese counterpart Xi Jinping met in Buenos Aires in December and agreed on a 90-day truce in a trade war that has disrupted the flow of hundreds of billions of dollars of goods.
US officials used three days of trade talks in Beijing to demand more details on China's pledge to make big purchases of American goods, as well as to push for ways to hold China to any commitments on changes to industrial policies.
Increased purchases by China of USA soybeans, oil, liquefied natural gas and financial services are viewed as easier to achieve than major changes to China's industrial policies aimed at transferring U.S. technology to Chinese firms.
Imports at major USA container ports are levelling off due to high warehouse inventories after retailers' months-long rush to bring in Chinese merchandise before higher tariffs hit, according to a US retail trade report.
A statement on the talks from the Office of the U.S. Trade Representative (USTR) did not mention any new breakthroughs, but instead listed longstanding topics of discussion.
"If you want to gauge how investors are viewing the trade talks, just watch tech, and semiconductors in particular", said Jack Ablin, chief investment officer at Cresset Wealth Advisors in Chicago.
Chinese exports to the USA have held up despite tariff increases of up to 25 percent on $250 billion of Chinese imports, partly due to exporters rushing to fill orders before more increases hit.
In return, the US will agree to wind down exorbitant tariffs now placed on Chinese imports.
"As for whether the Chinese economy is good or not, I have already explained this". Lu said an official statement would come later.
In early December, Washington and Beijing agreed to hold off on raising tariffs and to try and reach a deal before the beginning of March.
Few details emerged of the trade talks, which were scheduled to run through Tuesday.
The negotiations now pave the way for both countries' top negotiators - US Trade Representative Robert Lighthizer and Chinese Vice-Premier Liu He - to thrash out a deal.
A separate geopolitical issue angered China on Monday when a US Navy guided-missile destroyer sailed near disputed islands in the South China Sea - a vast expanse claimed by Beijing.
"Our sense is that there's good progress on the purchase piece", said one person familiar with the talks.
For its part, Beijing is unhappy with USA export and investment curbs, such as controls on "dual use" technology with possible military applications.
Chinese exports were resilient for much of 2018 as shippers rushed out goods to beat imposition of higher US tariffs.
The U.S. China Business Council, which represents American companies working in China, applauded the "substantive discussions" but urged both sides to make tangible progress on achieving equal treatment of foreign companies in China and changes to policies aimed at technology transfer. Prior to the meeting, China made a number of concessions to USA demands including temporarily cutting punitive tariffs on US -made cars, promising to open up its markets for more foreign investment and drafting a law to prevent forced technology transfers.
Even if a trade agreement is reached soon, analysts say it would be no panacea for China's economy, which is expected to continue decelerating in coming months.