U.S. aims to restart China trade talks,
will not accept conditions on tariff use
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[June 26, 2019]
By Jeff Mason
WASHINGTON (Reuters) - The United States
hopes to re-launch trade talks with China after President Donald Trump
and President Xi Jinping meet in Japan on Saturday, but Washington will
not accept any conditions around the U.S. use of tariffs in the dispute,
a senior administration official said on Tuesday.
Trump has threatened to impose tariffs on another $325 billion of goods,
covering nearly all the remaining Chinese imports into the United States
- including consumer products such as cellphones, computers and clothing
- if the meeting with Xi produces no progress in resolving a host of
U.S. complaints around the way China does business.
The two sides could agree not to impose new tariffs as a goodwill
gesture to get negotiations going, the official said, but he said it was
unclear if that would happen.
The United States was not willing to come to the Xi meeting with
concessions, said the official, who spoke on the condition of anonymity.
Washington wants Beijing to come back the table with the promises it
withdrew before talks broke down, he said.
China has shown no softening in its position and said on Monday that
both sides should make compromises in the trade talks and that a trade
deal has to be beneficial for both countries.
The back-and-forth set up what could prove to be a tricky meeting
between Trump and Xi at the Group of 20 summit meeting in Osaka. The
session will be the first time they have met since trade talks between
the world's two largest economies broke down in May, when the United
States accused China of reneging on reform pledges it made.
Chinese Vice Premier Liu He, who has led trade talks for Beijing, held a
phone conversation with his counterparts, U.S. Trade Representative
Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin, on Monday,
according to China's Ministry of Commerce. The three men are helping to
pave the way for talks between the leaders later this week.
Expectations for that meeting so far appear to be low. The best-case
scenario would be a resumption of official talks, which could ease fears
in financial markets that the already long trade dispute might continue
indefinitely. The fears have pummeled global markets and hurt the world
economy.
Trump advisers have said no trade deal is expected at the meeting but
they hope to create a path forward for talks. Once negotiations resume,
they could take months or even years to complete, the senior Trump
administration official said, with some parts agreed early and others
needing more time.
A resumption of negotiations could put that threat of further tariffs on
hold, at least for now.
But if Trump sees no progress and decides to raise tariffs, the
relationship between the world’s two largest economies would deteriorate
further.
“I think if they go with the tariffs, the trade talks are dead. Period,"
said one person familiar with the talks.
The United States has made clear it wants China to go back to the
position it held in a draft trade agreement that was nearly completed
before Beijing balked at some of its terms, particularly requirements to
change its laws on key issues.
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China's President Xi Jinping, first lady Peng Liyuan, U.S. President
Donald Trump and first lady Melania attend a state dinner at the
Great Hall of the People in Beijing, China, November 9, 2017.
REUTERS/Thomas Peter/File Photo
Beijing wants the United States to lift tariffs, while Washington
wants China to change a series of practices including on
intellectual property and requirements that U.S. companies share
their technology with Chinese companies in order to do business
there.
As part of the trade war, Washington has already imposed 25% tariffs
on $250 billion of Chinese goods, ranging from semi-conductors to
furniture, that are imported to the United States.
PRESSURE BUILDING
The president has spoken optimistically about the chances of a deal.
The administration official said rounds of meetings between top
trade officials from both countries likely would begin again after
the G20 summit. He noted that although the vice premier still led
China's trade delegation, new names had been added to the list who
could be hard-liners.
The official said Trump and Xi were unlikely to get into the fine
details of the draft trade pact, although the case of Chinese tech
giant Huawei Technologies Co may come up during talks.
Pressure on Huawei, which the U.S. government has labeled a security
threat, has increased in recent days.
About a dozen rural U.S. telecom carriers that depend on Huawei for
network gear are in discussions with its biggest rivals, Ericsson
and Nokia, to replace their Chinese equipment, sources familiar with
the matter said.
And the U.S.-based research arm of Huawei, Futurewei Technologies
Inc, has moved to separate its operations from its corporate parent
since the U.S government in May put Huawei on a trade blacklist,
according to two people familiar with the matter.
Trump has indicated a willingness to include the Huawei issue in a
trade deal, despite the national security implications cited by his
advisers about the company. Meanwhile, U.S. parcel delivery firm
FedEx Corp on Monday sued the U.S. government, saying it should not
be held liable if it inadvertently shipped products that violated a
Trump administration ban on exports to some Chinese companies.
The move came after FedEx reignited Chinese ire over its business
practices when a package containing a Huawei phone sent to the
United States was returned last week to its sender in Britain, in
what FedEx said was an "operational error."
(Reporting by Jeff Mason; additional reporting by Alexandra Alper,
Jane Lanhee Lee, Tarmo Vikri, Andrew Galbraith and Angela Moon;
editing by Simon Webb and Cynthia Osterman)
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