China Hopes to "Negotiate" Trade Issues With Joe Biden or 'Weak' Dems

Jeannie Matthews
May 10, 2019

In each of the seven chapters of the draft trade deal, China had deleted its commitments to change laws to resolve core complaints that caused the United States to launch a trade war: Theft of USA intellectual property and trade secrets; forced technology transfers; competition policy; access to financial services; and currency manipulation.

The US-China trade war has affected all worldwide trade, as the two countries also import from and export to many other countries. Beijing has counterpunched by targeting $US110 billion worth of American imports, focusing on farm products such as soybeans in a deliberate effort to inflict pain on Mr Trump's supporters in the USA heartland.

Beijing's top trade negotiator, Liu He, is traveling to the USA on Thursday and Friday for high-stakes talks.

The US has received an indication from China that Beijing wants to have a trade deal with the US, the White House said Wednesday, days after President Donald Trump threatened to raise tariffs on $200 billion worth of Chinese imports from 10 to 25 per cent.

Overall, China's trade surplus tumbled to $13.84 billion in April, down from $26.21 billion at the same time a year ago, according to the General Administration of Customs.

China's exports unexpectedly shrank in April but imports surprised with their first increase in five months, painting a mixed picture of the economy as Beijing and Washington make a last-ditch bid for a trade deal before a hike in US tariffs.

But their arrival is unlikely to stop the USA from going ahead with plans to raise import taxes on $USUS200 billion ($280 billion) in Chinese goods at 12.01am Friday, New York time, in a dramatic escalation of a year-long trade war. Jennifer McKeown, of Capital Economics, said goods exports to the United States accounted for 3.2% of China's national output, while exports to China made up only 0.6% of United States gross domestic product.

Trump's raging tweet announcing the tariffs on Sunday caught some American observers by surprise, seeing as the United States and China had both recently expressed optimism about reaching an agreement soon.

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The US stock market is down over 2% since Sunday but did not react to the comments on Wednesday from China. US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin alleged that China was going back on its commitment.

However, even though Chinese Vice Premier Liu He will appear in Washington, D.C., for negotiations Thursday and Friday, Beijing still appears to be playing hardball.

Stocks treaded water Wednesday after tumbling in prior-day trading, when the Dow fell 473 points and other benchmark indexes also slumped amid mounting investor concerns about trade tensions.

But William Reinsch, a trade policy expert at the Center for Strategic and International Studies, cautioned that China will never meet all the USA demands, which complicates Trump's strategy.

Oxford Economics warned that escalating the tariffs to the remaining Chinese goods, which would be expected to spark further retaliation from Beijing, would cut 0.3 percentage points off U.S. growth.

While these numbers sound massive, it's important to consider that the US gross domestic product is now running close to $21 trillion on an annualized basis.

Top US trade officials said China had backtracked on substantial commitments it made earlier in trade talks.

That's amusing, considering that has been China's answer to United States trade concerns ever since they got most-favored-nation status a generation ago. This practice of forcing businesses to hand over their secrets has helped China to catch up technologically with the West - but it has been strongly criticised by numerous country's trading partners, in particular the US.

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