Limited progress in China-US trade talks as demands emerge

Details have emerged from last week’s US-China trade talks, with both sides reportedly taking a hard-line approach.

Documents outlining the US and China’s respective demands highlight the scale of the challenge facing negotiators if a mutually acceptable deal is to be struck.

According to The Financial Times, the US demands include China cutting its $337bn-a-year trade surplus in goods and services with the US ‘by almost two-thirds over the next two years and [to] refrain from retaliation against any US trade actions.’

According to a document leaked on Chinese social media site Weibo, this deficit would be reduced by China ‘buying large, new imports from the United States,’ The Hill reports.

The US is also seeking to limit China’s ambitions to become world leaders in tech sectors through its Made in China 2025 policy – a demand unlikely to receive any support in Beijing.

China’s demands, meanwhile, include the US dropping its legal complaint over China’s licensing terms for foreign patent holders at the WTO, and to ‘immediately designate China a market economy.’

However, despite limited progress in the negotiations, Chinese media struck a positive tone, with China Daily saying the parties had ‘reached a number of trade agreements and agreed to set up a work mechanism to continue communicating with each other and to sort out unsolved problems and disputes.’

The outcome of these initial talks therefore appears to be, as The South China Morning Post put it, ‘an agreement to keep on talking but little else.’

That means US tariffs are still on the table and the spectre of a trade war remains looming, for now.

The Chinese Ambassador to the UK, His Excellency Liu Xiaoming, will be speaking at Asia House on the prospect of a US-China trade war on 21 May. Details here.