Good things are happening, Trump says of trade talks

Chinese Vice-Premier Liu He (right) shakes hands with US Trade Representative Robert Lighthizer (left) after a meeting at the Office of the USTR in Washington, DC, Oct 11, 2019.
Chinese Vice-Premier Liu He (right) shakes hands with US Trade Representative Robert Lighthizer (left) after a meeting at the Office of the USTR in Washington, DC, Oct 11, 2019.PHOTO: BLOOMBERG

Both sides appear willing to work towards partial deal, raising hopes of a trade truce

WASHINGTON • President Donald Trump said yesterday that US-China trade talks were going well, as the second day of top-level negotiations aimed at rolling back tensions between the world's two largest economies got off to a start.

"Good things are happening at China Trade Talk Meeting," he wrote on Twitter. "Warmer feelings than in recent past, more like the Old Days. I will be meeting with the Vice-Premier (Liu He) today. All would like to see something significant happen!"

Mr Trump has been sending positive vibes about getting a trade deal with China. On Thursday, he said that the first day of talks went "very well", and that he was planning to see Chinese Vice-Premier Liu He the next day.

"We just completed a negotiation with China, we're doing very well, we're having another one tomorrow. I'm meeting the Vice-Premier over at the White House, and I think it's going really well," Mr Trump told reporters.

The US and China have both appeared willing to work towards a partial deal, and leave the more controversial issues for later discussions. But Mr Trump repeated on Wednesday that he would prefer a complete agreement.

The core US demands would commit China to cracking down on the alleged theft of intellectual property and stop forcing US companies to hand over their commercial secrets as a condition of doing business in China.

Without progress, the US is due to increase tariffs on about US$250 billion (S$344 billion) of Chinese imports to 30 per cent from 25 per cent next Tuesday. More duties on US$160 billion of Chinese imports are due on Dec 15.

"Unlike much of this week's noise, the announcement of a meeting (on Friday) is significant," said Mr Clete Willems, a partner at Akin Gump who served previously served as a trade adviser to Mr Trump.

"I've been in that room in the past, and the President's direct involvement has always helped move things forward."

Chinese Foreign Ministry spokesman Geng Shuang said at a regular news briefing in Beijing: "We hope that we can work together with the US on the basis of mutual respect and equal treatment to promote positive progress during this consultation."

A Chinese official had earlier this week said the country was still open to reaching a partial trade deal with the US that may include large purchases of American commodities, but added that success was contingent on Mr Trump halting further tariffs.

 
 
 
 

Mr Trump last week approved licences for some American companies to sell non-sensitive goods to Huawei Technologies, the New York Times reported, citing people familiar with the move.

Although Mr Trump had committed to the move after meeting President Xi Jinping in June, no licences have been issued yet.

Still, in the increasingly hostile political climate towards Beijing, it is not clear how long any truce could last.

"Even if the President agrees to rolling back tariffs, he's likely to change his mind early next year if the deficit expands again or the Democrats become more effective in criticising his China policy," said Dr Derek Scissors, a China expert at American Enterprise Institute.

The discussions around an interim deal come as the Trump administration this week further ramped up pressure on Beijing by blacklisting Chinese technology firms over their alleged role in oppression in the far west region of Xinjiang, as well as placing visa bans on officials linked to the mass detention of Muslims.

People familiar with the discussions have said that the White House is looking at rolling out a previously agreed currency pact with China as part of a partial deal.

According to people familiar with the currency language, the pact - first announced in February - largely resembles what the US agreed to in a new trade agreement with Mexico and Canada and also incorporates transparency commitments included in Group of 20 statements.

The US-Mexico-Canada Agreement, which lawmakers in Washington have yet to ratify, says the signatories "should" maintain a market-set exchange rate, refrain from competitive devaluation, including through intervention, and strengthen underlying economic fundamentals in pursuit of economic and currency stability.

BLOOMBERG, REUTERS

A version of this article appeared in the print edition of The Straits Times on October 12, 2019, with the headline 'Good things are happening, Trump says of trade talks'. Print Edition | Subscribe