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After days of trade discussions, both China and the US agree that a stable relationship is crucial, but have made little progress on current issues.
After meeting in Beijing in hopes of resolving differences that have almost led to a trade war, top officials from the US have left China with minimal progress to show for it.
Following March and April’s aggressive back-and-forth tariff threats between two of the world’s biggest nations, American officials, including Treasury Secretary Steven Mnuchin, spent two days in China hoping to find a middle ground through trade discussions.
According to China’s Xinhua News Agency, the two countries were able to reach a consensus on some trade issues, but still found “considerable differences” on other matters.
“A disagreement over trade practices that has built up over more than two decades will take much more than two days to resolve,” Shane Oliver, head of investment strategy at AMP Capital Investors in Sydney, told Bloomberg. “A negotiated solution remains most likely but it will take time with a lot of posturing and near-death moments along the way.”
The topics covered by the two nations included bilateral service trade, two-way investment, intellectual property rights protection, tariffs and increased US exports to China.
While it is unknown what the consensus was for each issue, Xinhua states that both sides had a “thorough exchange of views” on the topics, and mutually agreed that a “sound and stable China-US trade relationship is crucial.”
The demands brought to the table by the US included cutting the trade deficit between the two countries by at least $200 billion by the end of 2020, along with instructions for China to not retaliate against the US. The two countries have reportedly agreed to stay in communication to continue working on their relationship and intertwining policies, but some experts think the dispute is bound to be dragged out.
“The US has gone off the deep end by asking for too much,” Brian Jackson, China director at Medley Global Advisors, told Bloomberg.
He added, “[t]hey’ve asked for $200 billion off the deficit in a very short timeframe. For me that’s a deal-breaker for the Chinese. If you state such an extreme starting position, you know you can’t get somewhere reasonable.”
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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.