China Trade Teams Far Apart on Reform Demands, Sources Say

Chinese President Xi Jinping met with US representatives as talks come up fast against a March 1 deadline

Chinese President Xi Jinping met with US representatives as talks come up fast against a March 1 deadline More

Trump said he likes tariffs which are bringing "many billions of dollars pouring into our Treasury", but continues to state that China is paying the duties, when in fact they are paid by U.S. companies and ultimately by American consumers in the form of higher prices.

He and U.S. Trade Representative Robert Lighthizer opened the meetings shortly afterward at the Diaoyutai state guest house with Chinese Vice Premier Liu He, the top economic adviser to Chinese President Xi Jinping.

But he added that the talks were "very complicated".

On Tuesday, the president said while he isn't inclined to extend the March 2 deadline, he might let it "slide for a little while" if talks go well. There are still not enough clues to suggest whether or not a final deal between the two parties can be reached.

After progress in the talks in Beijing, the fourth round of negotiations is scheduled for next week in Washington.

Such data contradicts the U.S. IMS manufacturing PMI, with the chart below showing consistent parallels between the two in the past few years.

Trump said earlier the talks could help decide whether he escalates the fight over China's technology ambitions by going ahead with more penalty duties March 2 on $200 billion U.S. of Chinese goods.

USA tariffs on $200-billion worth of imports from China are scheduled to rise to 25 per cent from 10 per cent if the two sides don't reach a deal by then, increasing pain and costs in sectors from consumer electronics to agriculture.

Mr Trump has also threatened further tariffs on an additional $267bn worth of Chinese products - which would see virtually all of Chinese imports into the USA become subject to these tariffs.

He added: "I think that whatever we might get for an agreement, it will be a pause, because the USA government is still going to move forward in the telecoms sector, on law enforcement and legal action, and on sanctions-related issues".

China's Foreign Ministry referred questions on the talks to the Ministry of Commerce, which did not respond to a request for comment.

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That would build on the more than 17 percent surge in the S&P 500 since it hit a 20-month low on December 24, when investors were spooked by Federal Reserve policy as their outlook for earnings and economic growth soured.

"One possible explanation for January's upbeat export data could be some re-arrangement of regional supply chains on the back of the ongoing China-US trade dispute", said Betty Wang, an economist at ANZ bank.

China's state media report said the talks over the past two days made some progress on hard and important issues.

China's exports last month unexpectedly returned to growth after a shock decline in December a year ago, while imports fell much less than expected, but analysts said that the strength was likely due to seasonal factors and predicted renewed trade weakness ahead. It gave no details.

China's January exports rebounded from a contraction amid a tariff battle with Washington while Chinese purchases of USA goods plunged.

After talks on Thursday, Mnuchin said on Twitter that he and Lighthizer had held "productive meetings" with Xi's top economic adviser, Liu He.

President Xi, 65, welcomed "important step-by-step progress" and said that his country was prepared to take a "co-operative approach" to resolve the dispute. The analysts surveyed by Reuters projected China's trade surplus to have narrowed to $33.5 billion from $57.06 billion in December.

The week-long trade talks in Beijing between top-level representatives of China and the United States ended on Friday without any agreement.

Chinese officials have emphasised that they are prepared to reach an agreement to reduce the trade deficit and have made commitments to increase purchases of USA goods. "I wouldn't quite call it hitting a wall, but it's not a field of dreams either".

Even if negotiators produce an agreement, it run might into opposition from within the Trump administration, Prasad said.

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