China and US still have ‘difficult discussions’ ahead on structural trade issues
- Negotiators have made progress but remain far apart on areas such as Beijing’s subsidies for state enterprises and its industrial policy, analysts say
- China not expected to give in on areas it considers to be ‘core interests’
Washington and Beijing remain divided over the US' demand that China make structural changes to its economy, analysts say, despite the trade war truce's being extended.
US President Donald Trump tweeted on Sunday that “substantial progress” had been made on intellectual property protection, technology transfer, agriculture, services and currency, after negotiators wrapped up two days of extended talks in Washington.
Trump also said he would push back the March 1 deadline for a boost in US tariffs on more than US$200 billion of Chinese goods, and that he would soon meet Chinese President Xi Jinping at Trump’s Mar-a-Lago resort in Florida “to conclude an agreement”.
China also offered to buy an additional 10 million metric tonnes of American soybeans during the latest round of talks, according to US Agriculture Secretary Sonny Perdue.
Trump’s upbeat assessment of the trade war negotiations was echoed by China’s official news agency Xinhua, which also reported “substantial progress” in the talks but said in a commentary that the two countries remained at odds over some issues and that new uncertainties could emerge.
Brock Silvers, managing director of Kaiyuan Capital, said despite the truce extension, the US would be unlikely to stop pushing for structural changes to China’s economy.
“Those issues have always been at the core of US demands,” he said. “Yet the ongoing difficulties therein can’t obscure that the [two] parties have made progress on a variety of issues. Trump has reasonably decided that such progress warrants a ceasefire extension.”
Silvers also said it was “surely no coincidence that the extension was announced just prior to important talks in Hanoi between Trump and North Korea’s Kim [Jong-un], in which the US would greatly benefit from Chinese cooperation”.