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January 14, 2019

U.S.-China Talks Go Well, But U.S. Will Work With Japan, EU To Address Overcapacity

Trade officials from China and the United States met last week in Beijing. The discussions were originally planned for two days only, but in what was taken as a positive sign, the group convened for an additional third day.

China’s Vice Premier Liu He, the country’s lead negotiator, also reportedly has agreed to come to Washington, D.C. to meet with U.S. Trade Representative Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin for additional negotiations, to take place on Jan. 30 and Jan. 31 if the federal operations have fully reopened. The ongoing U.S. federal government shutdown could delay that visit, The Wall Street Journal warned.

In a statement about last week’s negotiations, the Office of the U.S. Trade Representative said officials addressed “needed structural changes in China” regarding forced technology transfer, intellectual property protection, non-tariff barriers, cyber intrusions, and cyber theft of trade secrets and China’s pledge to purchase “a substantial amount” of agricultural, energy, and manufactured goods. U.S. officials also focused on the need to reduce the U.S.-China trade deficit.

According to The Journal, while the two sides last week made progress, they remain divided on several issues, including a reduction of Chinese subsidies to domestic firms and intellectual property protections.

There are now less than 50 days left to the 90-day moratorium China and the United States agreed to on tariffs. If the two sides have not reached an agreement before the end of the 90 days, the Office of the U.S. Trade Representative would then proceed with previous plans to elevate tariffs to 25 percent on that additional $200 billion worth of Chinese products.

The United States also is addressing Chinese trade practices in other ways. In related news: the United States, European Union, and Japan last week agreed last week to start drafting new rules to combat Chinese overcapacity. Click here to read more about this announcement.