World

US and China fail to agree on trade issues

Lack of consensus between two superpowers could impact other aspects of relationship

WASHINGTON: The United States and China failed to agree on major new steps to reduce the US trade deficit with China, casting doubt over President Donald Trump's economic and security relations with Beijing.

The annual economic dialogue session in Washington on Wednesday ended with cancelled news conferences, no joint statement and no new announcements on US market access to China.

The two sides had a "frank exchange" but failed to agree on most major bilateral trade and economic issues that were important to the US, a senior US official said on condition of anonymity because he was not authorised to speak publicly.

These included US demands for access to China's financial services markets, reducing excess Chinese steel capacity, reductions in auto tariffs, cutting subsidies for state-owned enterprises, ending Chinese requirements for data localisation and lifting ownership caps for foreign firms in China, the official said.

"China acknowledged our shared objective to reduce the trade deficit which both sides will work cooperatively to achieve," US Treasury Secretary Steven Mnuchin and US Commerce Secretary Wilbur Ross said in a brief statement, highlighting a rare point of consensus.

The Chinese embassy in Washington cast the talks in a positive light, saying in a statement that both sides had acknowledged "significant progress" on the 100-day talks and would work together to reduce the trade deficit.

"The two sides will expand areas of cooperation in services and increase trade in services; expand mutual investment, and create a more open, equitable, transparent and convenient investment environment," the embassy said.

Both sides agreed that one of the solutions to address the trade imbalance is for the US to expand exports to China, instead of reducing imports from China, said Chinese Vice-Finance Minister Zhu Guangyao after the talks.

To address the imbalance, China has been urging the US to remove regulations on export control and increase the exports of high-tech products to China, the official Xinhua news agency cited Mr Zhu as saying.

China will push for this in a one-year action plan for economic cooperation which both sides discussed, Mr Zhu said.

The session had been billed as a follow-up to Mr Trump's first meeting with Chinese President Xi Jinping at his Mar-a-Lago, Florida, estate in April when Mr Trump hailed Mr Xi's cooperation in curbing the threat from North Korea. Mr Trump said that this would lead to better trade terms for China.

The two leaders launched a 100-day economic plan that has produced some industry-specific announcements, including the resumption of American beef sales in China and a pledge to grant limited US access to some financial services sectors.

But there have been no new initiatives since, and Mr Trump has grown increasingly frustrated with China's lack of pressure on North Korea.

His administration has threatened new sanctions on small Chinese banks and other firms doing business with Pyongyang.

Mr Ross and Mr Mnuchin said the US position on the China trade relationship would be guided by "the principles of balance, fairness, and reciprocity... so we can give American workers and businesses an opportunity to compete on a level playing field". - REUTERS

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