As U.S.-China Trade Talks Continue, IMF Warns New Tariffs Could Harm Economy
Chinese trade officials, led by Vice Premier Liu He, and their U.S. counterparts met last week in Washington, D.C. to continue work on a potential trade deal between the two countries. Negotiators reportedly discussed technology transfers, intellectual property protections, non-tariff measures, services, agriculture, the current trade balance and enforcement and made enough progress to agree to keep talking on the remaining issues.
While the official statement from the White House said negotiators had “productive meetings and made progress on numerous key issues” – and President Donald Trump said a deal could come soon – U.S. Trade Representative Robert Lighthizer said there are “some major, major issues left.”
After a meeting with Vice Premier Liu, President Trump said, “The deal is coming along really well. We’ll probably know over the next four weeks. It may take two weeks after that to get it papered, but I really think that, over the next fairly short period of time, we’re going to know. And it’s looking very good.” Talks will continue this week. Larry Kudlow, the president’s top economic adviser, said negotiators plan to “be in touch” by phone.
The advancing negotiations came the same week that the International Monetary Fund (IMF) predicted new U.S. tariffs on Chinese products could devastate both countries’ economies. According to The Wall Street Journal, the IMF said, if enacted, 25 percent tariffs on Chinese imports to the U.S. coupled with Chinese retaliatory tariffs on U.S. goods would lower U.S. gross domestic product (GDP) by 0.3-0.6 percent and China’s GDP by 0.5-1.5 percent.
The IMF said while global growth would decline overall, certain regions, including Mexico and Canada, would benefit in the short run from trade diverted through their economies.