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US, Chinese trade deputies face off in Washington amid deep differences

by September 20, 2019 Market

U.S. and Chinese deputy trade negotiators resumed face-to-face talks for the first time in nearly two months, as the world’s two largest economies try to bridge deep policy differences and find a way out of their protracted trade war.

The negotiations, which extended into Friday, are aimed at laying the groundwork for high-level talks in early October that will determine whether the two countries are working toward a solution or headed for new and higher tariffs on each other’s goods.

A delegation of about 30 Chinese officials, led by Vice Finance Minister Liao Min, met counterparts at the U.S. Trade Representative’s (USTR) office near the White House. Deputy USTR Jeffrey Gerrish led the U.S. delegation.

Two negotiating sessions over the two days will cover agricultural issues, while just one will be devoted to the strengthening of China’s intellectual property protections and the forced transfer of U.S. technology to Chinese firms.

Pres Donald Trump is eager to provide export opportunities for U.S. farmers, a key Trump political constituency that has been battered by China’s retaliatory tariffs on U.S. soybeans and other agricultural commodities.

U.S. Commerce Secretary Wilbur Ross, in an interview on Fox Business Network on Thursday, said it remained unclear what China wanted and that we will find out very, very shortly in the next couple of weeks.

What we need is to correct the big imbalances, not just the current trade deficit, Ross said. It’s more complicated than just buying a few more soybeans.

In an unexpected twist, some members of the Chinese delegation will stay in the United States to visit U.S. farming regions next week, Agriculture Secretary Sonny Perdue told reporters.

They want to see the production of agriculture. I think they want to build goodwill, Perdue said.

Trump has said that China failed to follow through on agricultural purchase commitments made by President Xi Jinping at a G20 summit in Japan as a goodwill gesture to get stalled talks back on track. China has denied making such commitments.

When such purchases failed to materialize during U.S.-China trade talks in late July, Trump quickly moved to impose 10% tariffs on virtually all remaining Chinese imports, untouched in previous rounds.

Last week, however, Trump delayed a scheduled Oct 1 tariff increase on $250 billion worth of Chinese imports until mid-month, and China postponed tariffs on some U.S. cancer drugs, animal feed ingredients and lubricants.

On Thursday, USTR said dozens more Chinese products would be excluded from existing tariffs, including dog collars, some printed circuit boards used in computers, certain auto parts and Christmas tree lights.

The trade war, which has dragged on for 14 months, has rattled financial markets as policymakers and investors worry about the global economic fallout.