WASHINGTON, Feb 20, 2019 (BSS/AFP) – President Donald Trump said Tuesday
that trade talks with China are complex but are “going very well” and again
indicated the March 1 deadline for raising tariffs could be extended.
Officials on Tuesday resumed the high-stakes negotiations aimed at ending
a damaging tariff war between the economic superpowers.
“I think the talks are going very well,” Trump said on the sidelines of an
event at the White House. But he called the discussions “very complex.”
After the third round of talks ended Friday in Beijing with no deal, Trump
suggested he could extend a March 1 truce deadline for an agreement to be
reached.
If he does not extend the timeframe, the US is set to more than double
punitive import tariffs on $200 billion in Chinese goods.
“I can’t tell you exactly about timing. The date is not a magical date
because a lot of things are happening,” Trump told reporters. “We’ll see what
happens.”
That comment cheered investors and sent US stock prices higher, boosting
confidence that the sides will avoid worsening the conflict. Markets in
London, Frankfurt and Tokyo also gained ground.
Senior officials were due to hold another round of talks on Thursday and
Friday but deputy level meetings got underway Tuesday.
On Friday, Trump had reiterated he might be willing to hold off on
increasing tariffs to 25 percent from the current 10 percent on March 1 on
$200 billion in Chinese goods if Washington and Beijing were close to
finalizing an agreement to deal with US allegations of unfair trade and theft
of American technology.
American officials accuse Beijing of seeking global industrial dominance
through an array of unfair trade practices, including the alleged theft of
American intellectual property, and Washington has demanded a reduction in
the US trade deficit with China.
– Structural changes needed –
The talks are aimed at “achieving needed structural changes in China that
affect trade between the United States and China,” the White House said
Monday.
Bloomberg reported Tuesday that the White House also is seeking a
commitment from China to keep its currency from depreciating against the US
dollar, which would counteract the impact of the tariffs.
Citing two people familiar with the negotiations, the report said the
currency issue has been discussed multiple times and the United States could
use even higher tariffs to respond to a weakening of the yuan.
Robin Brooks, chief economist at the Institute for International Finance,
a global banking organization, said the six percent decline of the yuan —
also known as the renminbi or RMB — against the dollar counteracted the
impact of the two rounds of US tariffs on a total of $250 billion in Chinese
goods.
Brooks told AFP that “the RMB is still undervalued significantly.”
However, the currency has recovered since the low point of October 31,
which indicates markets are expecting an agreement that would roll back the
tariffs significantly — a view he called “too optimistic.”
Beijing and Washington have imposed duties on more than $360 billion in
two-way trade, which is weighing on their manufacturing sectors and has
shaken global financial markets.
Brooks said Chinese companies also have cut prices to try to prevent sales
to the United States from eroding too far, which is hurting their bottom line
and means China is paying an economic price for the tariff war.
Since the December detente, China has resumed purchases of some US
soybeans and dangled massive buying of American commodities to get US trade
negotiators closer to a deal.
US Trade Representative Robert Lighthizer will lead the American
delegation, which includes Treasury Secretary Steven Mnuchin, Commerce
Secretary Wilbur Ross, economic policy adviser Larry Kudlow and trade adviser
Peter Navarro, the White House said in a statement.
“The two sides will also discuss China’s pledge to purchase a substantial
amount of goods and services from the United States.”
China’s Commerce Ministry said its delegation will be led by Vice Premier
Liu He, who is Beijing’s top trade negotiator and key aide to President Xi
Jinping, who agreed to a trade war truce with Trump at a meeting in Buenos
Aires in December.
“We hope China and the US will both work hard together to implement the
important consensus reached by our two heads of state in Argentina, get down
to work and walk together in the same direction towards a mutually acceptable
and mutually beneficial agreement,” Foreign Ministry spokesman Geng Shuang
told reporters on Tuesday.