1. Money matters
May 4, 2018

Trade War: Trump’s team leaves Beijing, with no apparent consensus reached

By Rachel Dobbs

Two days of trade talks between the US and China have concluded, with little to show for them, as US President Donald Trump’s financial team prepares to leave Beijing.

The US delegation asked China to reduce the trade deficit between the two nations by at least $200 billion by the end of 2020. This target is double the amount Trump previously demanded of Beijing.

In 2017 the total deficit for goods and services between the two nations was $337 billion.

The possibility of reducing the deficit is one of the conditions on which Trump said he would consider halting the escalating tariffs proposed by both sides.

Other requests made by the US reportedly include China reducing tariffs and removing investment restrictions on US companies operating in China, according to a briefing document which has been circulating media outlets.

The delegation also asked China to cut subsidies linked to its so-called Made in 2025 industrial policy plan. This plan is aimed at upgrading and promoting Chinese industry, targeting tech industries such as artificial intelligence and electric vehicles.

As yet, there has been no indication from either side about the exact Chinese response to these demands.

However, ahead of the talks, China’s state news agency Xinhua warned against “unreasonable demands”. The Wall Street Journal has also quoted Chinese officials as saying that the US proposals were “unfair”.

US Treasury Secretary Steven Mnuchin, who led the US delegation, told reporters “we are having very good conversations” with China, but did not elaborate further.

Xinhua reported that the trade discussion was “candid, efficient and constructive” but that disagreements between the parties remained “relatively big”.

Despite the lack of details, it has been reported that both sides have agreed to continue talking about the issues.

If the US and China are unable to strike a deal over trade, the simmering standoff between the two is likely to continue and worsen.