BEIJING: China and the US ended the second day of high-stakes trade talks Friday with “big differences”, Beijing said, leaving the world’s two largest economies on the brink of a trade war that could have knock-on effects on the global economy.
The talks were aimed at forestalling momentum towards the looming conflict, with both sides prepared to pull the trigger on tariffs that could affect trade in billions of dollars of goods.
“Both sides recognise there are still big differences on some issues and that they need to continue to step up their work to make progress,” China said in a statement released by the official Xinhua state news agency.
The discussions promised a potential off-ramp for the trade conflict — US President Donald Trump has threatened to levy new tariffs on $150 billion of Chinese imports while Beijing shot back with a list of $50 billion in targeted US goods.
“The two sides exchanged views on expanding US exports to China, trade in services, bilateral investment, protection of intellectual property rights, resolution of tariffs and non-tariff measures,” Xinhua said.
It added that they had reached “a consensus in some areas”, without elaborating.
The countries agreed to establish a “working mechanism” to continue talks, it said.
The announcement followed comments by Treasury Secretary Steven Mnuchin earlier in the day that the two sides were having “very good conversations”.
However, American officials declined to give further details of the discussions.
Detailed List
China is confused about what the US actually wants, said Zhang Monan, a researcher at the influential think-tank China Center for International Economic Exchanges.
Those reforms include a timeline to lift foreign ownership restrictions for automakers, permitting foreign investors to take controlling stakes in some financial firms, and on Friday, allowing foreign companies to trade iron futures on domestic exchanges.
But a list of demands presented to Beijing before the negotiations got under way showed such piecemeal reforms fell far short of US expectations.
The document, divided into eight sections, was presented as a starting point for negotiations, according to Bloomberg News.
The asks included cutting China’s trade surplus with the US by at least $200 billion by the end of 2020, lowering all tariffs to match American levels, eliminating technology transfer practises, and cutting off support for some industries fostered by China’s industrial policies, Bloomberg reported.
