It appears to be going as smoothly as wading through treacle while pushing a wheelbarrow. In Washington, trade talks will resume after a fraught and tough opening session on Thursday.
Key issues still need to be resolved, despite Beijing ‘abruptly terminating’ an anti-dumping investigation into sorghum imported from the United States.
At least this was seen as a sign that China was trying to ease trade tensions with the US after proposed tit-for-tat tariffs, amounting to US$100 billion on imported products and goods, were wheeled out by Washington and Beijing.
“The imposition of anti-dumping and anti-subsidy measures on imports of sorghum originating from the United States would have a widespread impact on consumer living costs, and does not accord with the public interest,” China’s Commerce Ministry said in a statement.
While significant as the decision effectively ends China’s investigation which halted multi-million-dollar imports, there are bigger challenges facing Vice-Premier Liu He’s delegation and Treasury Secretary Steven Mnuchin’s team.
At the core of these discussions are demands from the White House to rebalance the trade deficit with Beijing, which was $375.2 billion last year and $58 billion between January and March in 2018.
Beijing is unlikely to cave into this ultimatum. “[China has become] very spoiled,” Trump said during a briefing before later meeting economic envoy Liu.
President Donald Trump has called for a reduction of up to $200 billion, as well as an end to state subsidies to technology companies, which strikes at the heart of President Xi Jinping’s “Made in China 2025” policy.
Beijing is unlikely to cave in to that ultimatum. “[China has become] very spoiled,” Trump said during a briefing before later meeting economic envoy Liu.
When asked whether the trade talks could iron out crucial sticking points, he replied: “Will that be successful? I tend to doubt it.”
In response, the world’s second-largest economy has been just as forthright when outlining its position as both sides tiptoe through a labyrinth of detailed discussions and national interests.
The Ministry of Commerce reiterated that the China-US trade relationship has to be aligned to market forces and conform to global rules.
“We will resolutely defend our own interests and will not make a deal at the cost of China’s core interests,” Gao Feng, a ministry spokesman, told a media briefing.
Still, Liu did come armed with a shopping list of American products and goods that Beijing is willing to buy. Although open to conjecture if it will reduce the deficit by $200 billion, there were unconfirmed reports that a breakthrough was possible.
But while the next 24 hours will be crucial, the rivalry between China and the United States will linger on after the Washington talks fade into history.