U.S., China could settle immediate trade issues: Ross on CNBC

Andrew Cummings
January 9, 2019

U.S. Commerce Secretary Wilbur Ross, left, shakes hands with Chinese Vice Premier Liu He as they pose for photographers after their meeting at the Diaoyutai State Guesthouse in Beijing, June 3, 2018.

Still, talks between the world's two biggest economies have repeatedly yielded no breakthroughs since they started in May, and Beijing has repeatedly said it won't cave to US demands.

Trump said on Sunday that trade talks with China were going very well and that weakness in the Chinese economy gave Beijing a reason to work toward a deal.

The Wall Street Journal reported Tuesday the two sides were narrowing their differences, with Chinese officials offering greater purchases of USA goods and services and Cabinet-level follow-up meetings expected later this month. China responded by imposing penalties on $110 billion of American goods, slowing customs clearance for US companies and suspending issuing licenses in finance and other businesses.

Trade talks in Beijing between the United States and China will continue for a third day, the office of the US Trade Representative (USTR) confirmed on Tuesday.

The meeting marks the first face-to-face talks between the two governments since Chinese President Xi Jinping and President Donald Trump agreed to a tariff truce when they met during G-20 summit.

Lu Kang, spokesman for China's foreign ministry, said on Monday that Chinese military aircraft and naval vessels were dispatched to identify the USA vessel and warn it to leave the area near the disputed Paracel Islands in the South China Sea, claimed by China.

U.S. Secretary of State Mike Pompeo told CNBC that the United States and China are "making progress" on trade.

The United States and China have held their first face-to-face trade talks since Presidents Donald Trump and Xi Jinping agreed December 1 to postpone further tariff increases in the trade war between the world's two biggest economies.

China called it a violation of its sovereignty which has damaged "peace, safety and order" in the waterway.

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

Trump has imposed tariffs to pressure Beijing to change its practices on issues ranging from corporate espionage to market access and industrial subsidies.

"This trade fight couldn't have come at a worse time for China".

Scott Kennedy, director of the Project on Chinese Business and Political Economy at the Center for Strategic and International Studies in Washington, said the two sides for the first time were discussing topics that matter most to the Trump administration. Economists say that is too little time to resolve a laundry list of irritants in trade relations.

There are growing concerns that the trade war could escalate into a broader conflict between the United States and China, as top Trump administration officials have attacked China on issues ranging from alleged human rights abuses to influence operations in the US.

Chinese growth fell to a post-global crisis low of 6.5 percent in the quarter ending in September. The move prompted China to increase tariffs on United States dollars 110 billion of U.S. goods. They complain China's companies are treated unfairly in national security reviews of proposed corporate acquisitions, though nearly all deals are approved unchanged.

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