Published: Fri, February 01, 2019
Finance | By Kristine Clayton

China does not want an increase in tariffs

China does not want an increase in tariffs

Chinese negotiators have met in Washington with a U.S. delegation led by President Donald Trump's hard-nosed trade representative, Robert Lighthizer, in a bid to end a trade war that is threatening global growth.

The talks began two days after the United States charged Chinese telecommunications company Huawei Technologies Co Ltd and its chief financial officer, Meng Wanzhou, with conspiring to violate USA sanctions on Iran by doing business through a subsidiary it tried to hide. "The talks will continue and you can not expect to solve all the issues at once", said Liu Weidong, expert in USA affairs at the Chinese Academy of Social Sciences.

Yet the odds seem stacked against any substantive resolution this week to the standoff between the world's two biggest economies.

On Monday, China's biggest technology company, Huawei, was indicted on USA charges including technology theft.

US President Donald Trump has repeatedly said he favors a healthy Chinese economy, but not at the expense of American business and know-how.

"The idea of just grabbing (technology) however they can is kind of ingrained at this point", said Amanda DeBusk, chair of the worldwide trade practice at Dechert LLP and a former Commerce Department official. The White House also plans to hike tariffs on $200 billion worth of Chinese imports from 10 percent to 25 percent.

US Treasury Secretary Steve Mnuchin told the South China Morning Post on Wednesday that both sides had "had a good discussion".

But the issues facing the two countries are broader than the trade deficit. USA officials have denied any link between the trade talks and the Huawei case.

In another tweet on Thursday, Trump warned that a trade deal with China would be unacceptable unless Beijing opened its markets to USA financial services, manufacturing, agriculture and other industries.

"Uncertainty is not the friend of business", he said.

In a sign that Beijing is serious about addressing United States complaints, Chinese lawmakers this week completed a second review of a new law that is aimed at protecting the IP of foreign investors and banning forced technology transfers.

"Let me be clear".

Complicating matters is the Justice Department's move this week to press criminal charges Chinese tech giant Huawei. "There is no doubt about that".

Trump later intervened to modify the penalties, allowing ZTE to avoid collapse.

Past time for Intel leaders to "stage an intervention" with Trump Venezuelan opposition leader pens op-ed in NY Times urging unity Trump says he has not spoken to Whitaker about end of Mueller probe MORE on Thursday said that China "does not want an increase in Tariffs" and that trade talks this week "are going well".

It also predicted overall US GDP growth would slow to 2.3 per cent this year, 1.7 per cent in 2020, and 1.6 per cent in 2021.

The good news is that the stakes are high enough that the dispute over Huawei probably won't bring things to a halt.

"The danger here is that other countries will conclude Trump is a paper tiger", said Edward Alden, senior fellow at the Council on Foreign Relations. "But there is still a very long way to go", he added.

"It will reinforce that argument that China's best strategy is to wait and to stonewall and Trump will back down".

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