China trade talks enter crucial phase before Trump's tariff call

Cornelia Mascio
Febbraio 14, 2019

China's trade surplus with the U.S. narrowed in January even as its American imports continued to plunge, official data released on Thursday showed, as officials from the world's top two economies sat down for crucial trade talks in Beijing.

Mr Mnuchin is heading the USA delegation along with trade representative Robert Lighter and the pair are expected to meet China's vice premier Liu He in Beijing tomorrow and Friday.

This round of high-level consultations are expected to conclude on Friday.

But global stocks rose after Trump's hint of a deadline extension.

Investment banker Mr Mnuchin said "so far, so good" when asked how the trade pact talks were going but refused to comment on who he had been meeting with.

US tariffs on $200 billion worth of imports from China are scheduled to rise to 25 percent from 10 percent if the two sides don't reach a deal by the deadline, increasing pressure and costs in sectors from consumer electronics to agriculture.

Mr Trump has indicated he is flexible to the March 1 deadline, suggesting he would let the date "slide for a little while" if a deal was in sight but would prefer not to do so.

Negotiators have said any final agreement will have to be made by Mr. Trump and his Chinese counterpart, Xi Jinping.

Mr. Trump's December agreement to postpone more tariff hikes while the two sides negotiate expires March 1.

Trump's advisors have described March 1 as a "hard deadline", and the president has said a delay was possible though he preferred not to do so.

The US is demanding far-reaching changes to Chinese practices that it says are unfair, including theft of US technology and intellectual property, and myriad barriers that foreign companies face in the Chinese domestic market.

Beijing has offered to boost its purchases of U.S. goods but is widely expected to resist calls for major changes to its industrial policies such as slashing government subsidies.

Exports to the United States also declined 2.4 per cent to US$36.54 billion, the lowest amount since April 2018.

"The downbeat outlook for global growth means that this year is likely to be challenging for Chinese exporters, even if the ongoing US-China trade negotiations culminate in a deal", Evans-Pritchard wrote in a research note.

China's exports rebounded in January from a contraction late previous year amid trade tensions with Washington, but imports declined. While Chinese officials have repeatedly pledged to improve market access for foreign investors, few experts expect Beijing to agree to anything that would force fundamental changes to what Washington complains is its state-led approach to trade.

The Global Times struck a confident pose in an editorial late on Wednesday, saying that though Washington had started the trade fight, it "was now more willing to reach an agreement". "The policy has been tested by the trade war and we have seen the change in Washington's attitude".

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