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U.S. aims to restart China trade talks, will not accept conditions on tariff use

PoliticsJun 25, 2019 09:57PM ET
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© Reuters. FILE PHOTO: China's President Xi Jinping, first lady Peng Liyuan, U.S. President Donald Trump and first lady Melania attend a state dinner at the Great Hall of the People in Beijing

By Jeff Mason

WASHINGTON (Reuters) - The United States hopes to re-launch trade talks with China after President Donald Trump and President Xi Jinping meet in Japan on Saturday, but Washington will not accept any conditions around the U.S. use of tariffs in the dispute, a senior administration official said on Tuesday.

Trump has threatened to impose tariffs on another $325 billion of goods, covering nearly all the remaining Chinese imports into the United States - including consumer products such as cellphones, computers and clothing - if the meeting with Xi produces no progress in resolving a host of U.S. complaints around the way China does business.

The two sides could agree not to impose new tariffs as a goodwill gesture to get negotiations going, the official said, but he said it was unclear if that would happen.

The United States was not willing to come to the Xi meeting with concessions, said the official, who spoke on the condition of anonymity. Washington wants Beijing to come back the table with the promises it withdrew before talks broke down, he said.

China has shown no softening in its position and said on Monday that both sides should make compromises in the trade talks and that a trade deal has to be beneficial for both countries.

The back-and-forth set up what could prove to be a tricky meeting between Trump and Xi at the Group of 20 summit meeting in Osaka. The session will be the first time they have met since trade talks between the world's two largest economies broke down in May, when the United States accused China of reneging on reform pledges it made.

Chinese Vice Premier Liu He, who has led trade talks for Beijing, held a phone conversation with his counterparts, U.S. Trade Representative Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin, on Monday, according to China's Ministry of Commerce. The three men are helping to pave the way for talks between the leaders later this week.

Expectations for that meeting so far appear to be low. The best-case scenario would be a resumption of official talks, which could ease fears in financial markets that the already long trade dispute might continue indefinitely. The fears have pummeled global markets and hurt the world economy.

Trump advisers have said no trade deal is expected at the meeting but they hope to create a path forward for talks. Once negotiations resume, they could take months or even years to complete, the senior Trump administration official said, with some parts agreed early and others needing more time.

A resumption of negotiations could put that threat of further tariffs on hold, at least for now.

But if Trump sees no progress and decides to raise tariffs, the relationship between the world’s two largest economies would deteriorate further.

“I think if they go with the tariffs, the trade talks are dead. Period," said one person familiar with the talks.

The United States has made clear it wants China to go back to the position it held in a draft trade agreement that was nearly completed before Beijing balked at some of its terms, particularly requirements to change its laws on key issues.

Beijing wants the United States to lift tariffs, while Washington wants China to change a series of practices including on intellectual property and requirements that U.S. companies share their technology with Chinese companies in order to do business there.

As part of the trade war, Washington has already imposed 25% tariffs on $250 billion of Chinese goods, ranging from semi-conductors to furniture, that are imported to the United States.

PRESSURE BUILDING

The president has spoken optimistically about the chances of a deal.

The administration official said rounds of meetings between top trade officials from both countries likely would begin again after the G20 summit. He noted that although the vice premier still led China's trade delegation, new names had been added to the list who could be hard-liners.

The official said Trump and Xi were unlikely to get into the fine details of the draft trade pact, although the case of Chinese tech giant Huawei Technologies Co may come up during talks.

Pressure on Huawei, which the U.S. government has labeled a security threat, has increased in recent days.

About a dozen rural U.S. telecom carriers that depend on Huawei for network gear are in discussions with its biggest rivals, Ericsson (BS:ERICAs) and Nokia (HE:NOKIA), to replace their Chinese equipment, sources familiar with the matter said.

And the U.S.-based research arm of Huawei, Futurewei Technologies Inc, has moved to separate its operations from its corporate parent since the U.S government in May put Huawei on a trade blacklist, according to two people familiar with the matter.

Trump has indicated a willingness to include the Huawei issue in a trade deal, despite the national security implications cited by his advisers about the company. Meanwhile, U.S. parcel delivery firm FedEx Corp (NYSE:FDX) on Monday sued the U.S. government, saying it should not be held liable if it inadvertently shipped products that violated a Trump administration ban on exports to some Chinese companies.

The move came after FedEx reignited Chinese ire over its business practices when a package containing a Huawei phone sent to the United States was returned last week to its sender in Britain, in what FedEx said was an "operational error."

U.S. aims to restart China trade talks, will not accept conditions on tariff use
 

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Jason Zou
Jason Zou Jun 25, 2019 8:28PM ET
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Why bother to meet Xi, Mr. President? Just have them pay US 1000% tariff on everything, what a beautiful thing and MAGA!
Sergiy Nevskyy
Sergiy Nevskyy Jun 25, 2019 8:28PM ET
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Not so simple , tariffs are paid by US importers/ US companies It’s true z to be comprtitive chineese need to reduce price b4 import duty - but only if there is a competitive product on the market with different origin. Taking in account z production of many hightech is concentrated in China - its just a taxation of US consumer - say you would pay 25% more for Apple snd Dell products
Jeffrey Nowakowski
Jeffrey Nowakowski Jun 25, 2019 8:27PM ET
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Free trade requires free access to markets without fear of technology theft. If China will not follow the WTO agreements they signed then there is no point in talking.If tariffs don’t work then it is time to follow Mark Cuban’s advice and halt Chinese IPOs on US exchanges.
John Niemotka
John Niemotka Jun 25, 2019 8:27PM ET
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Let me add, with a higher likelihood of tariff to be imposed especially when we’re talking about technology theft this opens the door for the possibilities of stronger US manufacturing.
Alex Fernandez
Alex Fernandez Jun 25, 2019 8:27PM ET
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There goes David Wong talking about president Xi. I quote Mr. Wong, "President Xi is 9 feet tall, blows fire out of his nostrils, and has a golden sword that can chop through Titanium". Did I miss anything else?
Matthew NT
MatthewBT Jun 25, 2019 8:04PM ET
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Trump's greed in full display. Just expect others to meet his demands without giving much in return. Talks are doomed to fail as such. Meanwhile American public is paying for Trump's reckless tariff. Worsening with full effect of 25% tariff taking effect soon. Win-win deal should be negotiated for the good of both countries.
Jeffrey Nowakowski
Jeffrey Nowakowski Jun 25, 2019 8:04PM ET
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Most of the US demands are for China to follow the WTO agreements they signed.
Brady Murray
Brady Murray Jun 25, 2019 8:04PM ET
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agreed its not greed.. its stop stealing from us. you speak of honor then show some respecrazy and honor your agreements. quit cheating commies
sam c
sam c Jun 25, 2019 8:04PM ET
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you're absolutely right.
yeong karkin
yeong karkin Jun 25, 2019 8:04PM ET
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Since when US ever respect WTO rules?
HJ Index
HJ Index Jun 25, 2019 7:57PM ET
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only white people lead the world, right Trump and his followers?
Bryan McAdams
Bryan McAdams Jun 25, 2019 7:57PM ET
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typical ignorance.The lefts exscuse
David Wong
David Wong Jun 25, 2019 7:22PM ET
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Xi will only have tea with Trump and that is it. If Trump doesn't understand the fundanentals of making deals, Xi will shake his head and let Trump fall down. Trump right now needs Xi more than Xi needs him. Xi is President for life, Trump needs to get his act together quick or we say bye bye to him.
Steve Bucher
Steve Bucher Jun 25, 2019 7:22PM ET
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Trump has much more business experience than Xi. China undeniably has much more to lose than the US. 300 billion in exports and continue theft of American and European technology.
David Wong
David Wong Jun 25, 2019 7:22PM ET
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How can someone steal something when their technology is way ahead? China is the leader in AI, 5G, IoT, etc. China is the new beginning for decades to come as theybare set to dominate for a very long time.
Lorne McLean
Pat88 Jun 25, 2019 7:22PM ET
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David Wong China has ripped off many western nations of their Technology and business secrets.....China does not invent anything they steal it and then try and claim as their own. They are a country with no scruples.. . . David ....... do you live in China?
Lloyd McCord
Lloyd McCord Jun 25, 2019 6:39PM ET
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Don't do it Mr. President!
Paul Manefee
Paul Manefee Jun 25, 2019 6:34PM ET
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Trump will be out of office is he backs down
Henry Yang
Henry Yang Jun 25, 2019 5:36PM ET
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Hope it is true that America will stand pat!
Zhenguo Zhang
Jack_A Jun 25, 2019 3:55PM ET
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Good luck!
Alex Fernandez
Alex Fernandez Jun 25, 2019 1:52PM ET
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Who wants to bet me $5 dollars David Wong, Zou, or Chang is going to comment on this article about how great and powerful China and Xi are?
Giraffe jazz
Giraffe jazz Jun 25, 2019 1:52PM ET
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LOL
Paul Manefee
Paul Manefee Jun 25, 2019 1:52PM ET
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LOL those laughable china trolls
David Wong
David Wong Jun 25, 2019 1:52PM ET
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Lol ... I am here!
TAIJI JIANG
TAIJI JIANG Jun 25, 2019 1:52PM ET
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and what about u ? i bet u 5 dollars u are gonna comment on this article
 
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