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Trade breakthrough elusive as China cancels US farm visits

Trade breakthrough elusive as China cancels US farm visits
NO, THANK YOU: Members of the Chinese delegation leave after deputy-level US-China trade talks in Washington DC.

Washington/Chicago - Two days of talks 'productive'; principal-level meeting in Washington would take place in October as planned

By Reuters

Published: Sat 21 Sep 2019, 9:55 PM

Last updated: Sat 21 Sep 2019, 11:58 PM

A US-China trade deal appeared elusive after Chinese officials unexpectedly cancelled a visit to farms in Montana and Nebraska as deputy trade negotiators wrapped up two days of negotiations in Washington.
Chinese officials were expected to visit US farmers next week as a goodwill gesture, but cancelled to return to China sooner than originally scheduled, agriculture organisations from Montana and Nebraska said.
The US had removed tariffs overnight from over 400 Chinese products in response to requests from US companies.
The Chinese Embassy and the US Department of Agriculture did not immediately respond to requests for comment. The US Trade Representative's office issued a brief statement characterising the two days as "productive" and that a principal-level trade meeting in Washington would take place in October as previously planned.
Trade experts, executives and government officials in both countries say that even if the September and October talks produced an interim deal, the trade war has hardened into a political and ideological battle that runs far deeper than tariffs and could take years to resolve.
The Chinese delegation did not present any new proposals on core structural issues including intellectual property protections, forced technology transfers, industrial subsidies and other trade barriers, said a person briefed on the talks.
"The conclusion from the US side was that we're not close to an agreement," the person said. This source and another person familiar with the talks said that the Chinese delegation's leader, Vice-Finance Minister Liao Min, laid out China's demands that any deal must remove all US tariffs and be balanced so that it is not all concessions from Beijing and none from Washington. The sources said that a lack of results from deputy meetings is not uncommon as they often are not authorised to make deals or present new offers.
The early October meeting will include the top trade negotiators: Chinese Vice-Premier Liu He, US Trade Representative Robert Lighthizer and US Treasury Secretary Steven Mnuchin.
It is expected to determine whether the world's two largest economies are starting to chart a path out of their 14-month trade war or headed for new and higher tariffs on each others' goods.
Cancellation of the Chinese agriculture visits, which were seen as potentially leading to increased purchases of US soyabeans and meat caused Wall Street's main stock indexes to fall as early optimism about the talks faded.
Grain and soyabean futures on the Chicago Board of Trade and livestock futures on the Chicago Mercantile Exchange also slumped. China is the world's largest importer of soyabeans.
Before the talks started, some reports had suggested that an interim deal was being considered, involving Chinese purchases of US farm goods, some improvements in Chinese market access and an easing of US sanctions on Huawei Technologies.
But US President Donald Trump made clear on Friday that purchases would not be enough for him to end his punitive tariffs.
"We're looking for a complete deal. I'm not looking for a partial deal," he told reporters, adding that he did not need a deal to happen before the 2020 presidential election.
Speaking at a White House meeting with Australian Prime Minister Scott Morrison, Trump touted the billions of dollars in US tariff receipts on Chinese imports, adding that the total would soon reach $100 billion.
"I will say this: we're making a lot of progress with China," the Republican president said.
The Trump administration and China's Communist Party remain far apart on issues that are the basis of their trade dispute, including the US declaring some Chinese state companies national security risks, and Beijing's refusal to revamp its economic model by eliminating subsidies for state companies.
USTR issued three Federal Register notices on Friday to exclude a wide range of products from tariffs in response to requests from US companies, which argued that the levies would cause economic hardship.
The 437 exempted products range from printed circuit boards for computer graphics processors to dog collars, laminated wood flooring and miniature Christmas lights.
The United States is asking that China substantially increase purchases of American soybeans and other farm commodities, a person with knowledge of the planned discussions told Reuters.

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