PEKING / WASHINGTON (Reuters) – US and Chinese trade negotiators are coming to Shanghai for their first face-to-face talks this week, following a G20 cease-fire last month for a year-long trade war.
FILE Photo: US President Donald Trump attends a bilateral meeting with China's President Xi Jinping at the G20 leaders summit in Osaka, Japan on June 29, 2019. REUTERS / Kevin Lamarque / File Photo
Expectations of progress during the two Today's meeting in Shanghai is low, so officials and companies hope that Washington and Beijing will at least detail the pledges for goodwill gestures and pave the way for future negotiations can.
These include Chinese purchases of US agricultural commodities and the United States, which enable companies to resume some sales to Chinese technology giant Huawei Technologies.
President Donald Trump said Friday that he believes China may want to sign a trade agreement after the 2020 election, hoping to negotiate more favorable terms with another US president.
"I think China will probably say" Wait, "Trump told White House reporters," let's see if any of those people who betray the United States can be elected. "
Since In more than a year, the world's two largest economies have created billions of dollars in tariffs on reciprocal imports, the disruption of global supply chains and the disruption of financial markets in the dispute over China's "state capitalism" that the world is doing business with.
( See timeline graphic: tmsnrt.rs/2DVZ7mN)
Trump and Chinese President Xi Jinping agreed last month on the resumption of trade talks that stalled in May at the G20 summit in Osaka, Japan last month Washington accused Beijing of having denied most of the negotiations parts of a draft agreement – a collapse of talks that one to he led to a drastic increase in US tariffs on Chinese goods worth $ 200 billion.
After the meeting in Osaka, Trump said he would not impose new tariffs on China's final $ 300 billion imports and that Huawei would lift some US restrictions if China agreed to purchase US agricultural products.
CHIPS AND GOODS
Since then, China has signaled that Chinese companies can make duty-free purchases of US agricultural products. Washington has encouraged companies to file a petition to lift a national ban on sales to Huawei and announced that it will respond in the next few weeks.
In the talks of next week, however, no side has implemented the measures that should prove their goodwill. This is bad for their chances of solving core issues in the trade dispute, such as US complaints about government subsidies in China, forced technology transfers, and intellectual property violations.
US. Officials have emphasized that relief on US sales to Huawei only applies to products that have no impact on national security, and industry observers believe that these facilities will only allow the Chinese technology giant to supply the most-processed US components to buy.
Reuters reported last week that Chinese Chinese soybean crushers are unlikely to be able to buy in large quantities in the US despite the potential imposition of import duty exemptions as soon as they deal with poor profit margins and longer-term doubts about Sino-US trade relations. Soybeans are the largest agricultural export of the USA to China.
"They are doing this little dance with purchases from Huawei and the ag," said a source recently briefed by senior Chinese negotiators. White House economic adviser Larry Kudlow said he would "not expect any great business" on Friday and the negotiators would try to "set the stage back" to bring the talks back to where they were before the demolition in May.
"We expect the Chinese to focus on (good) will and only support the trade balance with large-scale purchases of US agricultural products and services," Kudlow said on CNBC television.
US. Finance Minister Steven Mnuchin and sales representative Robert Lighthizer will meet in Shanghai on Tuesday for two-day talks with Chinese Vice Premier Liu He in Shanghai, both sides said.
"Less Politics, More Economy," said Tu Xinquan, a trade expert at Beijing University of International Business and Economics who closely follows the trade talks, about the possible reason why Shanghai was chosen as the location for talks.
"Each side can take a small step first to build some confidence, followed by more action," Tu said about the possible gestures of goodwill.
"DO THE DEAL"
A delegation of executives from the US company traveled to Beijing last week to explain to the Chinese authorities the urgency of a trade agreement. They warned the Chinese negotiators in meetings that the political calendar in China and the upcoming US presidential election would make agreement very difficult if no agreement was reached in the coming months.
"Make the deal. It's going to be a shame, but if it happens after December 31, it's not going to happen, "Reuters said, citing the US 2020 election. Others said the timeline was even shorter.
Two sources, briefed by senior Chinese negotiators ahead of next week's talks, said China still demands that all US tariffs be abolished as one of the conditions for a deal. Beijing is opposed to a phasing out of tariffs, while US trade officials see the abolition of tariffs – and the threat of reintroducing them – as a lever for enforcing agreements.
China is also firmly convinced that any purchase contract for US goods is at a reasonable level and that the deal is balanced and respects Chinese jurisdiction.
US. The negotiators have demanded that China make changes to its laws to protect the know-how of US companies. This has vehemently rejected Beijing. If the US negotiators want progress in this area, they may be satisfied with the Chinese State Council's guidelines, one source said.
A US-based industry source said that expectations for breakthroughs during the talks in Shanghai were low and that the primary goal was for each side to be clear about the "goodwill" measures associated with the Osaka Summit gained.
There is little clarity on what bargaining text the two sides will rely on, as Washington complies with the pre-May bill and will restart China with the copy it has sent back to the US officials with numerous edits and editors wants and triggered the collapse in talks in May.
Zhang Huanbo, senior researcher at China Center for International Economic Exchange (CCIEE), said he could not review US officials' complaints that 90 percent of the deal had been agreed before the collapse in May.
"We can only say that there may be a first draft. There is only zero and 100% – Deal or No Deal, "Zhang said.
Reporting by Michael Martina and Kevin Yao in PEKING; David Lawder, Steve Holland and Makini Brice in Washington; Edited by Simon Webb and Daniel Wallis