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U.S.-China Trade Talks End. Now High-Level Talks Can Begin.

BEIJING — Three days of trade negotiations between midlevel American and Chinese officials ended in Beijing on Wednesday afternoon with progress in identifying and narrowing the two sides’ differences but little sense of when they might reach a deal.

The trade talks could help clear the way for higher-level talks later this month, when President Trump attends the World Economic Forum in Davos, Switzerland. Vice Premier Liu He, China’s economic czar, is expected to come to Washington sometime after that.

A United States government official confirmed that the talks had ended but declined to elaborate. Chinese officials had no immediate comment, although the Commerce Ministry is expected to address the negotiations during its weekly news conference on Thursday.

While neither side issued a statement, the talks have raised prospects that the two sides could reach some kind of deal in the weeks before a March 2 White House deadline for raising tariffs on roughly two-fifths of annual American imports from China.

“I’m optimistic that they’re making progress — the tone of the talks is important, and this tone has been good,” said Dean Pinkert, a former commissioner of the United States International Trade Commission who is now a trade law partner at Hughes Hubbard & Reed, a big international law firm. “It is still important to the U.S. government to get credible commitments.”

At issue is the extent to which China is willing to offer binding commitments to change trade practices that have long irked President Trump and his administration.

The scheduled two-day talks extended into a third day as American officials pressed China for more details on how it will live up to its commitments, said people with knowledge of the negotiations, who insisted on anonymity to avoid disrupting the talks.

China has made a series of offers to the Trump administration in recent weeks to end the trade war. But many of the administration’s trade hawks regard them as nebulous, especially when it comes to Chinese trade practices that administration officials consider unfair.

They allege that officials in China pressure foreign companies to transfer key technologies to Chinese rivals as a condition for entering the country’s market. They also protest lavish government subsidies granted through the Made in China 2025 program to build local companies into global powerhouses in sectors like commercial aircraft, semiconductors and electric cars.

China denies that its trade practices have been unfair. Nevertheless, officials have agreed to make it easier for multinational corporations to participate in manufacturing development programs in China. They have also promised to improve intellectual property protection and to ban the forced transfer of technology.

Both sides see reasons to reach a deal soon. President Trump wants to stabilize volatile financial markets, people familiar with the Trump administration’s deliberations said. President Xi Jinping of China is trying to confront weak business and consumer confidence, which have already triggered a sharp economic slowdown in his country.

Adding to the difficulty of reaching a deal has been the fractious nature of the Trump administration, with the three main government departments involved in the negotiations each pursuing a somewhat different agenda. Those different agendas to some extent reflect each agency’s institutional biases and responsibilities, but make it harder to predict what a final deal will look like.

Robert E. Lighthizer, the United States trade representative and a hawk on trade issues, has led the push to impose tariffs on imports from China and has pursued an ambitious agenda that would require China to carry out verifiable and enforceable changes to the basic structure of its economy. President Trump last month said Mr. Lighthizer would be the lead trade negotiator with China.

The Commerce Department, which oversees American export promotion activities overseas, and Commerce Secretary Wilbur Ross have been pushing since the early days of the administration for a deal that would require China to buy more food, natural gas and other products from the United States. Beijing officials have been happy to go along, as their country is short on arable land and gas, and long-term purchase agreements fit easily into the Chinese government’s economic planning model.

The Treasury Department, under Treasury Secretary Steven Mnuchin, has been pushing for a quick deal that would stop further increases in American tariffs. But Treasury would preserve indefinitely the 25 percent tariffs that President Trump imposed last July and August on $ 50 billion a year in Chinese-made goods, or roughly a tenth of American imports, and the 10 percent tariffs that he imposed in September on another $ 200 billion in Chinese goods.

That first set of tariffs cover several categories in which China does not export much now but plans to do so in the next several years. The most important products covered by the 25 percent tariffs are gasoline-powered and electric cars. At least six Chinese automakers have announced plans to start exporting cars to the United States in 2020, said Michael Dunne, the chief executive of Zozo Go, an automotive consulting firm specializing in China.

“Import duties will slow — but not stop — Chinese automakers’ plans to enter the U.S.,” he said. “With a slowing home market, pressure to export has never been greater.”

Democrats and Republicans alike have been wary of allowing an influx of Chinese cars in an election year, particularly when manufacturing states like Indiana, Michigan Ohio and Wisconsin have been among the main electoral battlegrounds in recent decades.

In the latest sign that the Chinese economy could use a lift from a trade agreement, officials announced Wednesday evening that car sales plummeted 19 percent last month from a year earlier, the steepest such decline in modern record-keeping in China.

President Trump and President Xi Jinping of China agreed in Buenos Aires on Dec. 1 to a temporary truce that would keep last summer’s American tariffs in place and suspend much of China’s retaliation for those tariffs, but had few other details. So the quickest possible deal in the coming weeks could be to make that arrangement more permanent.

Complicating the trade talks has been President Xi’s decision to invite North Korea’s leader, Kim Jong-un, to visit Beijing this week. President Trump has been pushing North Korea to abandon the development of missiles with nuclear warheads that can reach the United States, but he needs China’s cooperation to do so because China is North Korea’s main ally and largest trading partner.

Yonhap, the South Korean news agency, reported that Mr. Kim had left Beijing early Wednesday afternoon, about the same time that the trade talks ended. Mr. Lu, the Chinese foreign ministry spokesman, declined to provide details.

Source: NYT > World

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