The U.S. and China have started to outline commitments in principle on the stickiest issues in the trade dispute, marking the most significant progress yet toward ending a seven-month trade war, according to a report from Reuters.
U.S. Treasury Secretary Steven Mnuchin, U.S. Trade Representative Robert Lighthizer, and Chinese Vice Premier and lead trade negotiator Liu He participating in the talks.
The U.S. and China have imposed tit-for-tat tariffs on hundreds of billions of dollars of goods, slowing global economic growth, skewing supply chains, and disrupting manufacturing.
At meetings between the U.S. and Chinese officials last week in Beijing the two sides worked on outlining obligations on paper. Sources said the process has become a true trade negotiations, so much so, that at the end of the week, the participants considered staying in Beijing to keep working. However, instead they agreed to take a few days off and reconvene in Washington.
As officials hold high level talks on Thursday and Friday this week in Washington, they remain far apart on demands made by President Trump’s administration for structural changes to China’s economy. However, the broad outline of what could make up a deal is beginning to emerge from the talks, sources said, as the two sides push for an agreement by March 1.
March 1 marks the end of a 90-day truce that President Trump and Chinese President XI Jinping agreed to when they met in Argentina late last year. Time is running out ahead of the March 1 deadline to resolve the dispute or see U.S. tariffs on $200 billion of Chinese goods rise from 10 percent to 25 percent. One senior Chinese government official familiar with the talks said that extending the deadline was an option, though both sides are working to reach agreement before March 1 and any extension would not be too long.
Negotiators are drawing up six memorandums of understanding (MOUs) on issues including forced technology transfer and cyber theft, intellectual property rights, services, currency, agriculture and non-tariff barriers to trade, according to sources familiar with the progress of the talks.
The MOUs cover the most complex issues affecting the trading relationship between the two countries and are meant, from the U.S. perspective, to end the practices that led Trump to start levying duties on Chinese imports in the first place.
Sources cautioned that the talks could still end in failure. But the work on the MOUs is a significant step in getting China to sign up both to broad principles and to specific commitments on key issues.
Several Chinese government sources told Reuters that the two countries have basically reached a consensus on alleviating the trade imbalances, but there was still some differences on each other’s “core demands” that they were seeking to narrow.
The United States has accursed Beijing of forcing U.S. companies doing business in China to share their technology with local partners and hand over intellectual property secrets. China denies it engages in such practices.
Trump administration officials also object to non-tariff barriers in China, including industrial subsidies, regulations, business licensing procedures, product standards reviews, and other practices that they say keep U.S. goods out of China or give an unfair advantage to domestic firms.
