Oil rises one per cent on US, China trade talk optimism

Andrew Cummings
January 10, 2019

Speaking at a daily news briefing in Beijing, Chinese foreign ministry spokesman Lu Kang confirmed both sides had agreed to extend the talks beyond Monday and Tuesday as originally scheduled.

USA and Chinese negotiators wrapped up their latest round of trade talks in Beijing on Wednesday as they seek a way out of a damaging trade war.

One tumultuous chapter of trade deliberations between the USA and China has ended, with both sides now hopeful that a far-reaching deal can be made before an imminent tariff deadline.

Increased purchases by China of United States soybeans, oil, liquefied natural gas and financial services are viewed as easier to achieve than major changes to China's industrial policies aimed at transferring USA technology to Chinese firms.

Trump said the USA tariffs had hurt China.

U.S. officials also conveyed Trump's commitment to address his country's trade deficit with China and to resolve structural issues to improve trade between both countries, according to the USTR. President Donald Trump tweeted "Talks with China are going very well!" late on Tuesday in Beijing.

"Actively implementing the important consensus reached by the two heads of state, both sides held broad, in-depth and detailed exchanges on trade issues of mutual concern as well as structural issues".


However, if no deal is reached by March 2, Trump is prepared to hike tariffs from 10 percent to 25 percent on $200 billion worth of Chinese imports.

Such a move would likely prompt further retaliation by China, which has already levied tariffs on US goods, further rattling investors who are nervous about a significant slowdown in China's economy.

Three days of trade talks in Beijing between the United States and China ended Wednesday with the White House expressing optimism.

The extra day of talks came amid signs of progress on issues including purchases of US farm and energy commodities and increased access to China's markets. Hong Kong's main market index closed up 2.1 percent and Tokyo rose 1.1 percent.

Trade and concerns over slowing economic growth triggered a selloff at the end of 2018 that culminated in Wall Street posting its worst monthly performance in about a decade in December, driving down earnings estimates and stock valuations.

One of the biggest challenges to any deal would be to ensure that China enforces whatever is agreed to stop technology transfers, intellectual property theft and hacking.

The US highlighted China's pledge to purchase more agriculture and other goods, without providing specifics.


Oil prices jumped, helped by the hopes of easing trade tensions between China and the US, while OPEC-led crude output cuts also provided support.

"It seems there have been no fist fights internally between the two delegations", a person familiar with the progress of the talks told CNN on Tuesday, describing them as "constructive".

That issue was the first stressed in the statement released Wednesday, which noted that "the officials also discussed the need for any agreement to provide for complete implementation subject to ongoing verification and effective enforcement".

Later this month, Lighthizer is expected to meet with Vice Premier Liu He, Xi's top economic aide who is leading negotiations for China.

USA companies also want action on Chinese policies they complain improperly favor local companies. The Chinese side has suggested talks were "constructive". China retaliated with tariffs of its own.

For their part, Chinese officials are unhappy with USA curbs on exports of "dual use" technology with possible military applications.

With cooling economic growth raising the urgency for a settlement, this week's talks went ahead despite tension over the arrest of a Chinese tech executive in Canada on US charges related to possible violations of trade sanctions against Iran.


Other reports by iNewsToday

FOLLOW OUR NEWSPAPER