Level U.S.-China trade talks resume as irritants sour atmosphere

Galtero Lara
Octubre 10, 2019

Early on Thursday, Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin began a thirteenth round of economic negotiations with a delegation led by Vice Premier Liu He.

"Big day of negotiations with China", Trump said on Twitter. "They want to make a deal, but do I? I meet with the Vice Premier tomorrow at The White House".

While Beijing theoretically wants to end the trade war, Chinese Communist Party officials are not optimistic about the size or scope of any agreement with Washington in the short term, the Chinese officials said.

Economists are predicting a deal that rolls back the $360 billion in tariffs Trump has imposed on Chinese goods and cancels some $120 billion in duties China's president, Xi Jinping, has on U.S. exports.

"China is having a hard time at this moment".

Trump - who has taken the global economy on a white-knuckle ride since launching multi-pronged trade offensives with China, Europe and other allies previous year - reiterated Thursday that the outcome was down to him.

Stock futures later recovered some of those losses after the White House told CNBC's Kayla Tausche that the SCMP report was inaccurate.

"We all know the next round of tariffs is going to hurt the United States as much or more than China", Wendy Cutler, vice president of the Asia Society Policy Institute, told AFP.

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Liu said the Chinese delegation "came to the negotiations with utmost sincerity" and "is willing to carry out serious dialogue with the USA side on issues of mutual concern, including trade balance, market access and investor protection", the official Xinhua News Agency reported.

Markets saw series of ups and downs on Thursday morning as investors awaited developments in the talks to resolve an ongoing trade war between Washington and Beijing, which are now in their third day. But warning signs for the global economy have blared ever louder in recent weeks, however, increasing the pressure on both sides to reach a deal. The tweet, since deleted, led to the cancellation of National Basketball Association events in China this week.

The window for such an agreement is closing before the USA plans to raise duties to 30% from 25% on about $250 billion of Chinese imports on October 15. Bloomberg News last month reported the White House was discussing plans for an interim deal. We've come this far.

Risk assets are jumping on the headline above but I think the algos are a bit too quick to jump the gun here.

"I want to stress once again that the USA practices are neither honorable nor ethical", foreign ministry spokesman Geng Shuang told reporters.

"We do not love tariffs - in fact we would prefer not to use them - but after years of discussions and no action, tariffs are finally forcing China to pay attention to our concerns", Ross said in remarks prepared for delivery on an official visit to Australia.

A White House spokesman declined to comment.

No details were made public about the U.S. Then, in August, the Trump administration formally declared China a currency manipulator.

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