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U.S., China to Continue Trade Talks Ahead of Scheduled Tariff Increase

Monday, February 18, 2019
Sandler, Travis & Rosenberg Trade Report

The U.S. and China saw “progress” in recent trade talks in Beijing but “much work remains,” according to a Feb. 15 White House statement. Talks will continue in Washington during the week of Feb. 18 as the two sides seek to avoid a scheduled March 2 increase in U.S. tariffs on $200 billion worth of imports from China from 10 percent to 25 percent.

According to the statement, the U.S. continues to focus on structural issues such as forced technology transfer, intellectual property rights, cyber theft, agriculture, services, non-tariff barriers, and currency. The two sides also discussed China’s purchases of U.S. goods and services, which could reduce the U.S. trade deficit with China. However, the two sides are reportedly still working to develop a memorandum of understanding, which the statement indicates would set forth any commitments made.

The White House said the discussions were “detailed and intensive” but offered no additional information. According to press sources, the talks saw China promise to notify its central and local government subsidies to the World Trade Organization and eliminate those that violate WTO rules. 

However, a Politico article states that Beijing appears to be resisting other U.S. demands during ministerial level talks, including additional access to the Chinese market and a provision that would allow the U.S. to reimpose tariffs if China backtracks on any commitments it makes. Instead, officials appear to be holding out for an expected meeting between the presidents of the two countries that they believe offers “the best hope of reaching a trade agreement that would promise large Chinese purchases of US exports but avoid difficult structural reforms.” Nevertheless, President Trump continues to emphasize his demands for a “real deal.”

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