Trump to meet China envoy, lifting hopes for trade talks

Andrew Cummings
October 11, 2019

The Trump administration has continued to weigh a range of additional punitive measures it could take against the Chinese economy, casting uncertainty around recently-resumed efforts to defuse trade tensions between the two sides.

Early on Thursday, Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin began a thirteenth round of economic negotiations with a delegation led by Vice Premier Liu He.

Still, there was no hiding the sharp deterioration in relations this week.

"We are not aware of a change in the vice premier's travel plans at this time", a White House spokesman told CNBC.

"Big day of negotiations with China", Trump said on Twitter.

Such measures would be seen as a significant economic escalation from the United States, which has so far used tariffs as its main source of leverage in its dispute with China.

Brilliant, the U.S. Chamber official, said that the intellectual property issues under discussions were largely "20th century IP protections" involving copyright and trademark infringement, not those to protect data flows, computer source code and commercial data.

A Bloomberg report out Tuesday morning suggested China would be open to a partial deal that included Beijing agreeing to non-core concessions, like increasing its purchases of agricultural products, in exchange for the USA not imposing more tariffs on Chinese goods.

But Trump's attitude toward the process is subject to sudden change, given the churning pressures competing for his attention.

The U.S. Agriculture Department said on Thursday that private exporters reported a snap sale of 398,000 tonnes of soybeans to China, part of a flurry of purchases the top buyer of the oilseed has made since granting tariff waivers to some importers to buy U.S. soy as a goodwill gesture. We are taking in billions of dollars of tariffs.

President Trump has an important trade meeting scheduled for Friday.

But Clete Willems, a former Trump trade advisor, said Wednesday that a partial deal could be the president's best move. The question is do I want to make a deal.

"But China wants to make a deal very badly".

China's purchases of USA soybeans jumped in September after stagnating during the summer. In public statements, the president has regularly shifted between a willingness to reach a deal with China and the possibility of a prolonged dispute.

US central bankers believe the trade war is raising the chances the United States could slip into recession.

However, fundamentally, any sustained run now will depend on trade talks in Washington so until we have more clarity on that, it's hard to get too excited just yet about a major breakout towards the upside in the pair. "Every month that these trade talks continue, there's more and more friction in the relationship".

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