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U.S., China launch trade talks to avert tariff war, economic damage

Reuters  |  WASHINGTON 

By David Lawder

(Reuters) - The and launch a second round of trade talks on Thursday to try to avert a damaging tariff war, with the demanding a $200 billion cut in China's U.S. trade surplus and greater protections for intellectual property.

U.S. has threatened to impose up to $150 billion in punitive tariffs to combat what he says is Beijing's misappropriation of U.S. technology through joint venture requirements and other policies. has threatened equal retaliation, including tariffs on some of its largest U.S. imports, including aircraft, soybeans and autos.

At talks in two weeks ago, both sides presented lengthy lists of demands, agreeing only to keep talking.

The sought a $200 billion reduction in China's $375 billion U.S. goods trade surplus, an end to joint venture requirements that it says coerce from American companies and an end to subsidies for advanced under the "Made in China" 2025 program.

demanded that Trump relax crushing restrictions imposed on Chinese ZTE Corp, and end restrictions on Chinese investments in the and sales of high-technology goods to

Trump on Sunday wrote on he would help put ZTE back in business after a Commerce Department ban cut off its supply of U.S. components, forcing it to suspend operations.

In tweets on Wednesday, Trump linked ZTE's situation to a larger trade deal and said that has "much to give" on trade, denying suggestions his administration was "folding" in negotiations with China.

"Nothing has happened with ZTE except as it pertains to the larger trade deal," Trump wrote on

Top told on Thursday the discussion over ZTE was about re-examining the U.S. penalties, not waiving the enforcement action altogether.

"We have not seen China's demands yet, which should be few in that previous U.S. Administrations have done so poorly in negotiating," Trump wrote. "The U.S. has very little to give, because it has given so much over the years. China has much to give!"

CHINA PROPOSAL, TRUMP TEAM RIFT

Kudlow, in his interview with Fox, said the expected China to bring a proposal to the talks that would "extend the conversation and permit additional negotiations."

The discussions get underway with some drama as the White House's harshest China critic, Trump Peter Navarro, was relegated to a supporting role amid a growing rift with

Navarro will be present at the meetings, but the said they would be led by Mnuchin, Commerce and The Chinese side will be led by Liu He, the top to Chinese

Navarro, of the book "Death by China," has been a major advocate of punitive tariffs on Chinese goods.

He attended the initial talks in Beijing but had an angry exchange with Mnuchin on the trip, a person familiar with the episode said.

The talks will start as the finishes up public hearings on the first batch of U.S. tariffs on $50 billion worth of Chinese goods proposed as punishment for alleged violations of U.S. intellectual rights.

The tariffs, which target Chinese electrical and machinery parts, autos and flat-screen television sets, could take effect in early June, and may be followed by an additional round targeting $100 billion worth of goods yet to be identified.

LIU PLEDGES HARD WORK

Liu started his visit in Washington by meeting with trade-focused U.S. lawmakers on Wednesday, listening to their concerns and telling them he would work hard to address problems in the U.S. trade relationship.

Lawmakers said they told needed to address U.S. concerns about intellectual property theft, forced technology transfers, barriers to investment in China and U.S. agricultural exports.

"He recognizes there are problems in this trade relationship," said Republican Kevin Brady, of the "And his hope for this trip was to begin to address the trade imbalance, increasing demand of Chinese consumers for U.S. products, as well as to begin to take steps on the structural reforms."

(Additional reporting by and Doina Chiacu; Editing by and Jonathan Oatis)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

First Published: Thu, May 17 2018. 19:54 IST
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