Latest China trade talks indicate impasse

- Juni 04, 2018

High-level trade talks with China over the weekend produced no immediate breakthroughs, the White House indicated Monday in a bland statement that made no reference to Beijing's threat to halt the negotiations if the United States proceeds to impose tariffs on $50 billion worth of Chinese goods.

"The meetings focused on reducing the United States' trade deficit by facilitating the supply of agricultural and energy products to meet China’s growing consumption needs, which will help support growth and employment in the United States," the White House said.

"The United States officials conveyed President Donald J. Trump’s clear goal for achieving a fair trading relationship with China,“ the statement said.

The last line of the statement hinted of next steps to come. “The delegations will now report back to receive guidance on the path forward," the statement continued.

Beijing was first out of the gate with a statement on Sunday after two days of meetings in Beijing led by Commerce Secretary Wilbur Ross and Chinese Vice Premier Liu He.

China warned that "all economic and trade outcomes of the talks will not take effect if the U.S. side imposes any trade sanctions, including raising tariffs."


That was a reference to Trump's plan to impose a 25 percent tariffs on about $50 billion worth of Chinese goods related to a Chinese initiative that aims to make the country dominant in several high-tech sectors like robotics, artificial intelligence and self-driving cars.

The Trump administration plans to issue the list of goods that will be hit with the tariffs by June 15, and impose the duties shortly thereafter. That's expected to prompt China to retaliate on $50 billion worth of U.S. goods, including leading exports like soybeans and aircraft.

Trump seemed to allude to the possibility of China taking that action in a tweet Monday morning that noted "China already charges a tax of 16% on soybeans. Canada has all sorts of trade barriers on our Agricultural products. Not acceptable!"

Last year, the United States exported more than $12 billion worth of soybeans to China, accounting for more than half of U.S. agricultural sales to that country.

The purpose of Ross' trip was described as negotiating long-term contracts with the Chinese to boost sales of U.S. agricultural and energy products. However, the prospects for success seemed dim after Trump revived the threat last week to impose new duties on Chinese goods.

In a second tweet, Trump referred to both China and the stalled negotiations with Canada and Mexico over updating the 24-year-old NAFTA pact.

"Farmers have not been doing well for 15 years. Mexico, Canada, China and others have treated them unfairly. By the time I finish trade talks, that will change. Big trade barriers against U.S. farmers, and other businesses, will finally be broken. Massive trade deficits no longer!" he said.

In reality, despite some issues, Canada, China and Mexico are already the three biggest markets for U.S. agricultural exports, with each taking about $20 billion worth of American farm goods.

Farmers have been worried Trump could jeopardize those sales by imposing new tariffs on China or withdrawing from NAFTA, as he has often threatened to do.


 

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