p Will the US and China reach a trade deal? | 2019-01-30

Will the US and China reach a trade deal?


30th January, 2019 10:48:47 printer

Will the US and China reach a trade deal?


Top trade officials from the US and China are meeting in Washington as a deadline to strike a deal approaches.


This is the second round of talks since Presidents Donald Trump and Xi Jinping met in Argentina last year and agreed to negotiate in the hope of defusing an escalating tariff war.


There is widespread scepticism that the two sides can reach a substantive deal by the 1 March deadline.


Recent charges against Huawei have added to the complications.


At a press conference this week, Treasury Secretary Steven Mnuchin and White House economic adviser Larry Kudlow made few promises.


"Let me just remind people, we do have another 30 days after this so my expectation is we'll make significant progress at these meetings, but I would just emphasize these are complicated issues," Mr Mnuchin said.


Last week, US Commerce Secretary Wilbur Ross said the two sides remained "miles and miles" apart.


Mr Trump has long blamed China's rise as an exporter for a loss of manufacturing and other jobs in the US.


But the issues facing the two countries are broader than the trade deficit.


The US is pressing China to make changes to its economic policies, which it says unfairly favour domestic companies through subsidies and other support.


It has also accused the government of supporting technology theft as part of its broader development strategy.


Where do the two countries stand now?


The US imposed tariffs on $250bn worth of Chinese goods last year. China retaliated in kind, hitting $110bn of US products with duties.


The moves rattled financial markets and contributed to worries about economic slowdown in both countries, especially in China.


What happens next?


If the two sides cannot reach an agreement by 1 March, the US has said it will increase the tariff rate from 10% to 25% on Chinese goods worth an estimated $200bn.


Mr Trump has also threatened tariffs on an additional $267bn worth of products.