February 4, 2019

U.S.-China Trade Talks Moving, But Slowly

U.S. Trade Representative Robert Lighthizer and other U.S. government officials met last week in Washington, D.C. with Chinese Vice Premier Liu He to discuss a possible trade agreement between the two countries. As Connecting the Dots has reported previously, the two countries must reach a deal by early March, or President Donald Trump will raise the tariff rate on $200 billion in Chinese goods to 25 percent from 10 percent.

In additions to last week’s discussions, Vice Premier Liu He delivered a letter to President Trump from Chinese President Xi Jinping. President Trump called the letter “beautiful.” He also expressed confidence that the two countries will reach a deal by March.

In a White House press briefing after last week’s talks concluded, Ambassador Lighthizer said, “We did make progress on a variety of key issues. I’m not going to explain what the key issues are and there’s a lot more to be done.” Lighthizer did acknowledge there was no discussion about conditions for lifting tariffs the U.S. government put into place last year on more than $250 billion worth of Chinese imports. (Click herefor a timeline of when these penalties were put into place.)

A statement from the White House said the two parties discussed:

  • How market-distorting forces, including subsidies and state-owned enterprises, can lead to excess capacity;
  • The role of currencies in the United States–China trading relationship;
  • How U.S. companies are pressured to transfer technology to Chinese companies;
  • Stronger protection and enforcement of intellectual property rights in China;
  • Tariff and non-tariff barriers faced by U.S. companies in China;
  • Harm resulting from China’s cyber-theft of U.S. commercial property;
  • Removal of market barriers and tariffs that limit U.S. sales of manufactured goods, services, and agriculture to China; and
  • The need to reduce the trade deficit that the United States has with China.

While last week’s talks did not lead to any major breakthroughs, they did end with both parties committed to continued negotiations. U.S. Trade Representative Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin will lead a delegation to China in mid-February while President Trump and Chinese President Xi are expected to meet near the end of the month when President Trump will be in Asia for the second summit with North Korean leader Kim Jong-un.