Published: Fri, January 11, 2019
Finance | By Kristine Clayton

The Next Phase Of The US-China Trade Negotiations Begins

The Next Phase Of The US-China Trade Negotiations Begins

They include changes to China's policies on intellectual property protection, technology transfers, industrial subsidies and other non-tariff barriers to trade.

There's hope. and then there is reality which saw a whopping 10.6 million barrel surge in distillates and over 8 million barrels of gasoline added this week, numbers which were generally ignored by the market, which instead has been focusing on the recent plunge in the dollar, the result of a far more dovish Fed, which has helped support oil prices as the dollar decline made commodities priced in the US currency more affordable. As producers say they won't let oil stockpiles exceed normal levels, fears of a slowdown in demand is abating as trade tensions ease between the world's top-two economies.

The Wall Street Journal reported Tuesday the two sides were narrowing their differences, with Chinese officials offering greater purchases of U.S. goods and services and Cabinet-level follow-up meetings expected later this month.

The Trump administration wrapped up the latest round of trade talks in Beijing, noting a commitment by China to buy more USA agricultural goods, energy and manufactured items.

China's Commerce Ministry said ahead of the meeting that it would last only two days. Chinese officials say their companies are treated unfairly in national security reviews of proposed corporate acquisitions, though nearly all deals are approved unchanged.

Trump is locked in a stalemate with congressional Democrats over his demand for $5.7 billion in partial funding to build a wall on the U.S. -Mexico border.

In the meantime, companies in both countries are feeling pain from the effects of United States tariffs and retaliation from China, which are starting to mount.

It is unclear how much progress on those issues negotiators can make in 90 days, nor how much progress Trump would want to see to stop him from further escalating the trade war.

American leaders worry those plans might erode USA industrial leadership. -Chinese relations for years.

For its part, Beijing is unhappy with USA export curbs on "dual use" technology with possible military applications.

While differences remain, experts are optimistic that the two sides will be able to reach an agreement on trade by March 1, the deadline before the USA imposes heightened tariffs on Chinese goods.

Beijing has said it will not give up ground on issues that it perceives as core.

The paper said in an editorial that the dispute harms both countries and disrupts the global trade order and supply chains. The Chinese government is reported to be releasing a statement on the talks tomorrow.

It also said Washington and Beijing have discussed the need for the agreement "to provide for complete implementation, subject to on-going verification and effective enforcement". A jump in American petroleum inventories served as a reminder that booming USA shale-oil production may still flood the global market with more petroleum than it needs.

Derek Scissors, a China scholar at the American Enterprise Institute, a Washington think tank, said there was still time for a deal to be struck, but it will largely be based on American acceptance of Chinese promises for changes to its economic model, with little evidence of action. "We have firm confidence in the strong long-term fundamentals of the Chinese economy".

That added to advances since last week in equity markets around the world, following a strong US employment report and comments from the Federal Reserve chief that calmed worries USA interest rate hikes would hurt growth.

Asked what he expected to come out of this week's talks in Beijing, Trump sounded a positive note.

Companies in both the United States and China are feeling the pain from the effects of the U.S.

U.S. treasury officials have made the case that market volatility is in part due to the tightening of United States monetary policy, and a result of the trade war with China.

Chinese Foreign Ministry spokesman Lu Kang, speaking to reporters before the talks ended, confirmed that talks were extended for an unscheduled third day, saying this "shows that the two sides were indeed very serious in conducting the consultations". Xi promised to fix the trade imbalance issue with the United States by starting to purchase USA agricultural products.

Negotiations between US and Chinese trade officials, which began Monday in the Commerce Ministry in Beijing, finally concluded on Wednesday as both sides sought to inch closer to an understanding on a number of disagreements.

Like this: