Chinese and US officials are going all out to reach a trade agreement to end their year-long trade battle, China's commerce ministry said on Thursday, as the two sides prepare to hold a new round of trade negotiations in Beijing after a month-long hiatus.
Officials from the two countries have been making strides in previous talks, but there are still clear divisions over several core issues, from structural changes to compliance verification, to the fate of tariffs, which will likely be at the top of the agenda of this round of trade talks on Thursday and Friday.
The US delegation, led by US Trade Representative Robert Lighthizer and US Treasury Secretary Steven Mnuchin, arrived in Beijing Thursday and a working dinner with the Chinese team led by Vice Premier Liu He is scheduled, Gao Feng, a spokesperson for the China's Ministry of Commerce, said Thursday. Day-long negotiations are planned for Friday.
The two teams are making all-out efforts in serious negotiations and moving toward implementing the important consensus reached by the leaders of the two countries, Gao told a press briefing.
Since President Xi Jinping and US President Donald Trump agreed on a truce in December 2018, trade officials from both sides have conducted several rounds of talks in Beijing and Washington, which have so far de-escalated the bruising tariff war.
Most noticeably, the US, citing substantial progress in the trade talks, scrapped a plan to increase a 10 percent tariff on Chinese products to 25 percent on March 1. US officials have also adopted a more conciliatory tone toward the trade negotiations in the face of growing global and domestic pressure.
A deal to be made
In what experts call a show of good faith, China has also moved to address US concerns over its trade deficit, resuming the purchase of US soybeans and other goods. That might have contributed to a 14.6 percent fall in the US' overall trade deficit in January, analysts said. The US trade deficit with China also fell 6.4 percent to $34.5 billion during the month, according to official US data.
It's safe to say we are at a better point to reach a deal, said Bai Ming, an analyst at the Chinese Academy of International Trade and Economic Cooperation. We are in a final sprint before a final deal.
The meetings in Beijing will be followed by talks in Washington next week. If all goes well, we could see a trade deal very soon, said Bai.
James Stone, former chairman of the US Commodity Futures Trading Commission, also expressed optimism in a deal. It's proving to take longer and harder than I thought. I will still predict that it is so much in the interest of both countries to make a deal, and a deal will be made, he told the Global Times.
Every once in a while, nations get into conflicts that are destructive to both parties. But most of the time, they will figure out a way to find their own national interest in a deal, he said.
However, even as officials appear to inch closer to a final deal, there are still some thornier issues that pose uncertainties to the ongoing talks.
Though we are moving toward a deal, nothing is certain until the deal is signed, said Song Guoyou, Deputy Director of Center for American Studies and Director of Center for Economic Diplomacy at Fudan University . Some very important details still need to be worked out.
Recent signs suggest that the two sides are still far apart over certain issues, such as US claims of forced technology transfer and the fate of the tariffs the two have imposed on each other's goods.
In what Chinese experts call a move to test the waters ahead of the talks, unnamed US officials told Reuters Wednesday that China made an unprecedented proposal on technology transfer, puzzling many in China as to what kind of proposal China could have made, since the country has repeatedly denied forcing foreign firms to transfer their technology.
This is the US trying to keep the pressure on China, but I don't see what else China could do outside the new foreign investment law, Song said. The law, adopted by China's top legislature earlier this month, prohibits government agencies from using administrative means to force foreign firms to transfer their technology.
Another tricky issue is what the two sides will do with the current tariffs on each other's goods after a trade deal. The US wants to maintain its tariffs on Chinese goods to ensure compliance, while Chinese officials have called for all tariffs to be lifted after a deal.
In a conciliatory sign, an unidentified US official was quoted by Reuters as saying that the US may partly lift the tariffs. But China will not accept any deal that does not result in the removal of the tariffs, experts said.
This is far from over, given the high stakes for both sides. They will fight until the very end for what's best for them, Song said.
(Correspondent: Wang Cong, Source: Global Times, Zhou Zheng contributed to this story)
