China, US to resume trade talks, but divisions over tariffs remain

By Wang Cong Source:Global Times Published: 2019/3/21 20:53:40

Washington urged to remove tariffs through negotiations: analysts

An employee inspects imported cars at Qingdao Free Trade Port Zone, East China's Shandong Province. File photo: VCG

After a nearly month-long pause, Chinese and US trade officials are scheduled to hold two back-to-back rounds of high-level talks starting next week, signaling that the two economic powers are rushing for a final deal to end their tit-for-tat trade war, despite apparent divisions.

While the planned talks reflect renewed urgency - particularly from the US side - to reach an agreement, there are still clear divisions over what to do with tariffs already imposed on each other's goods and how to verify implementation of the potential deal, analysts said on Thursday. They said that China is unlikely to buckle on those core issues.

The talks are set to resume on March 28 and 29, when US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin are due in Beijing, Gao Feng, spokesperson for the Chinese Ministry of Commerce, told a press conference on Thursday. That would be followed by a trip by Chinese Vice Premier Liu He to Washington in early April for further talks, according to Gao.

Though officials continued their conversations over the phone, face-to-face meetings have been paused since the last round in Washington in late February. Chinese officials were focused on the domestic legislative and political consultative sessions, which ended last week, where lawmakers and advisors rallied support for the country to deal with external and internal pressures.

Clear divisions

But even as the two countries appear eager to move forward with the talks, there appear to be sticking points that Chinese analysts say could be deal breakers for Beijing.

According to a post on the White House website, US President Donald Trump said on Wednesday that the US would leave tariffs on Chinese products in place even if the two sides reach an agreement. In stark contrast, Chinese officials have stressed that all tariffs must be lifted. 

"We're not talking about removing them. We're talking about leaving them and for a substantial period of time," Trump said.

Asked about the comments, Gao said that the two sides have continued to talk over the phone in recent days but that no information on the specifics of the talks could be disclosed. 

However, during a press briefing on March 9, Vice Commerce Minister Wang Shouwen, who is part of the Chinese team in the talks, said that the two sides were working on a deal that would lift "all tariffs."

"If the US does not remove the tariffs, I don't think China will accept that," said Song Guoyou, director of Fudan University's Center for Economic Diplomacy. "Lifting tariffs is the prerequisite for reaching a trade deal."

Also asked about the tariffs at a press briefing on Thursday, Geng Shuang, a spokesperson for the Chinese Foreign Ministry, said China hopes that the two sides could reach a mutually beneficial deal based on mutual respect. "In fact, the talks have achieved substantial progress," he said.

If the US insists on leaving the tariffs in place, the two sides might need to renegotiate certain terms, according to Liang Haiming, dean of Hainan University Belt and Road Research Institute. "If the US won't remove the tariffs on Chinese products, then naturally China will also change its stance and retract some promises in key areas," he told the Global Times on Thursday.

Hinting at another sticking point in the talks, Trump on Wednesday also said that the US has to make sure China would live up to the deal. Chinese officials have been insisting that any mechanism to verify compliance must be two-way and fair, meaning China should also be able to review US compliance.

Chinese analysts said that China would not agree to a verification mechanism that only allows the US to check China's compliance, suggesting that would be a violation of China's sovereign rights. 

No rush to sign

"That is a very serious issue for China," Song said, noting that China would not compromise on such issues of principle. "If that means there would be no deal, so be it."

Analysts have also urged that officials should not rush for any trade deal that is unfair for China, arguing that China is at a much better position than previously to make sure that its legitimate concerns are also addressed by US officials.

"The US is in the rush [for a deal], not China," Liang said, pointing to the US administration's failed talks with North Korea last month, a faltering campaign to pressure European countries to ban Huawei and rising trade tensions between the US and the EU and other major economies such as India. 

"China is not isolated, the US is, increasingly."

The US administration has sought to raise tariffs on cars imported from Europe and to end trade preferences for Indian products. "I say [the EU] has been as tough on [the US] as China, just not as much money involved," Trump said on Wednesday.

"Against such a backdrop, buying some extra time is not a bad thing for China," Liang said.

Newspaper headline: New round of China-US trade talks

Posted in: ECONOMY

blog comments powered by Disqus