Published: Thu, January 10, 2019
Money | By Ethel Goodwin

Markets buoyed by optimism over US-China trade talks

Markets buoyed by optimism over US-China trade talks

The global economy has been suffering from the chilling effect of a trade war between the world's two largest economies. China responded by imposing penalties on $110 billion of American goods, slowing customs clearance for U.S. companies and suspending issuing licenses in finance and other businesses.

Almost halfway into the 90-day truce, there have been few concrete details on progress made so far. The meetings in Beijing were not at a ministerial level, so were not expected to produce a deal to end the trade war.

The Office of the United States Trade Representative said in a statement after the final sitting that China reiterated its commitment to buy a "substantial amount" of agricultural and manufacturing products from the USA to lower the trade deficit.

The Global Times commentary said China's growing economy means it can "carry out a more intense boycott" of trade with the United States if needed. The next round of talks is likely to take place in Washington between Lighthizer, who was appointed by Trump to lead the negotiations, and Chinese Vice Premier Liu He, President Xi's chief economic adviser. But aside from some soybean purchases, there has been little sign of big-ticket acquisitions.

Those purchases would help meet another key demand from Trump: that China take actions to reduce the massive US trade deficit with its biggest economic rival.

The U.S. economy grew at an annual rate of 3.4 percent in the third quarter, and unemployment is at a five-decade low.

However, the US side is pressing Beijing to scrap or change rules Washington says block market access or improperly help Chinese companies. -China relationship for years. Prior to the meeting, China made a number of concessions to US demands including temporarily cutting punitive tariffs on USA -made cars, promising to open up its markets for more foreign investment and drafting a law to prevent forced technology transfers.

Trump imposed tariff increases of up to 25 percent on $250 billion of Chinese imports.

Beijing has said it will not give up ground on issues that it perceives as core. "I don't know the timing and exactly what that will look like, but what I can be sure of is that we are moving towards a more balanced and reciprocal trade agreement with China".

The paper said in an editorial that the dispute harms both countries and disrupts the worldwide trade order and supply chains. It said USA negotiators would await "guidance on the next steps" after reporting back to Washington. In fact, the two sides may be even further apart on these underlying issues like forced technology transfer and intellectual property protection, among others, according to Bloomberg.

That issue was the first stressed in the statement released Wednesday, which noted that "the officials also discussed the need for any agreement to provide for complete implementation subject to ongoing verification and effective enforcement".

"We expect something will come out of this", White House spokeswoman Sarah Sanders told the Fox Business Network.

Jon Cowley, a senior lawyer at Baker McKenzie's worldwide commercial and trade practice group, said he expected that negotiators may have put together a framework for an agreement, but that existing tariffs would not be fully eliminated unless China met the United States "all the way".

Stock markets were roiled last week after Apple (APPL) warned it will badly miss its quarterly sales forecast because of weaker growth in China amid the trade war.

Lu Kang, China's foreign ministry spokesman, confirmed at a press briefing that the talks had ended and said that more details would be released soon.

Trade officials had scheduled two days of talks in Beijing in an effort to resolve their conflict this week, but extended those by an extra day after the meetings struck a positive tone.

The U.S. wrapped up three days of mid-level talks with China in Beijing on Wednesday, noting a commitment by President Xi Jinping's government to buy more U.S. agricultural goods, energy and manufactured products.

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