US, China hold crucial talks to ease trade war
Beijing, January 7
Delegates from the US and China on Monday began the crucial face-to-face negotiations here to ease a bitter trade war between the world’s two largest economies amid growing concerns about China’s slowing economy and its impact on American businesses.
The US and China have been locked in an escalating trade spat since early 2018, raising import tariffs on each other’s goods.
Last year, US President Donald Trump imposed tariff hikes of up to 25 per cent on USD 250 billion of Chinese goods. The move prompted China to increase tariffs on USD 110 billion of US goods.
Trump and Chinese President Xi Jinping agreed to halt any further tariff increases for 90 days beginning January 1.
Deputy US trade representative Jeffrey Gerrish is leading the US delegation at the two-day talks with Chinese vice-ministerial counterparts.
China is facing the daunting task of presenting a credible plan to meet Trump’s demands to cut down the USD 375 billion trade deficit.
Ahead of the talks, a Chinese government adviser on trade said, “The vice-ministerial talks won’t solve all the problems but both sides are expected to take the chance to check their respective demands and offers and to check any chance to reach a trade deal.”
“Both sides are close to finding a solution to address the trade imbalance,” the Hong Kong-based South China Morning Post quoted the unnamed adviser as saying.
Ahead of the talks, China softened its stand by offering a mix of concessions by resuming purchases of US soybeans, suspended punitive tariffs on imports of US cars and toned down its “Made in China 2025” hi-tech policy.
It has also proposed clear bans on forced technology transfer in new draft foreign investment legislation.
Both sides have set March 1 as the deadline to defuse trade tensions.
Trump, who has been accusing China of indulging in unfair trade practices contributing to the huge trade deficit amounting to USD 375 billion, sounded a positive note by saying that negotiations between the two sides were going “very well”.
“I think China wants to get it resolved. Their economy’s not doing very well,” he told reporters on Sunday.
“I think that gives them a great incentive to negotiate.”
Trump has already said he is ready to impose tariffs on the remaining USD 267 of annual Chinese exports to the US if the two sides fail to agree on a deal within the 90-day truce period.
The protracted trade war between the top two economies of the world is seen by many as a battle for global leadership.