US-China trade talks in Washington closed Wednesday without reaching a deal on the main issues involved. Press conferences arranged were canceled, and there were no official announcements or joint statements from those involved.
The US has criticized China’s huge trade surplus with the US and has demanded that trade arrangements become fairer. China’s $347 billion trade surplus with the US is a bone of contention with Donald Trump. In fact, Wilbur Ross, the US Commerce Secretary, made this plain in his opening remarks to the meeting. This size of surplus is not easily reversed.
The talks are officially known as the Annual US-China Comprehensive Economic Dialogue. The only statement issued noted that China acknowledged the US stance and the shared objective to reduce the trade deficit.
It is claimed that China’s massive excess steel capacity is responsible for a world steel glut that is affecting US producers. The possibility of a tariff resulted in a big increase is US steel stock prices. The United States Steel Corp shares closed up 4.8 percent, AK Steel rose 3.6 percent and Nucor increased 2.2 percent.
Separate to this meeting, President Trump has indicated that there was still a possibility that the US would apply tariffs to Chinese steel imports. When asked about the possibility, Trump responded: “Could happen”.
Among several issues and the US demands are the subsidies provided by the Chinese government to state- owned businesses. These are harming US manufacturers who do not have the benefit of such subsidies. Auto tariffs are another, along with ownership caps for foreign companies in China. From China’s point of view, the refusal of the US to sell China certain advanced technology products is an issue.
A connected problem is the apparent failure of China to press North Korea to abandon its missile and nuclear weapons program. These may not be part of the US-China trade talks, but it is still a topic of contention between the US and China. In fact, all of these are major issues between the two nations that seem unlikely to be resolved easily.
Although this round of talks achieved little, if anything, the two countries have shown a willingness to agree. US-China trade talks in May resulted in an agreement on reciprocal trading arrangements.
A ban was dropped on US beef imports into China, who also agreed to allow American liquid natural gas imports into the country. The Chinese market was also opened to US credit card and credit rating agencies. The US agreed to accept imports of Chinese cooked chicken.
The failure of the meeting to reach some agreement on these issues was disappointing to business leaders. In spite of this, individual companies intend to continue to increase bilateral trade and improve business relationships between the two countries.
Stephen Schwarzman, CEO of Blackstone Group, and Alibaba chief Jack Ma, jointly stated that “A stable, growing economic relationship between the United States and China is mutually beneficial to the people of our two countries and for the world.” The official US-China trade talks may have failed, but individuals are doing their best to develop and improve trade relations.
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