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US and China Wrap Up Talks on Tariff Battle

Share prices surged in Europe and Asia on Wednesday on hopes for progress in resolving the tariffs battle between the U.S. and China as talks in Beijing closed after being extended from two days to three.

BEIJING (AP) — Share prices surged in Europe and Asia on Wednesday on hopes for progress in resolving the tariffs battle between the U.S. and China as talks in Beijing closed after being extended from two days to three. .

No details were announced, but Asian stock markets rose after talks planned for two days were extended to three. Hong Kong's main market index closed up 2.1 percent and Tokyo rose 1.1 percent.

President Trump's televised address Tuesday night helped soothe some frazzled nerves over what steps he might take in the standoff with lawmakers over border wall funding and the partial government shutdown.

However, "Trump did not declare a national emergency, nor did he hint toward one, which might have been a fear before the speech," Stephen Innes of Oanda, a foreign exchange company, said in a commentary. He added: "Currencies are holding firm riding the wave sentiment from the positive buzz in U.S.-China trade talks."

The Chinese Foreign Ministry announced Wednesday that the trade talks ended after three days. It gave no details. But experts say it may take months to resolve the causes of the trade war, which include disagreements over Beijing's handling of technology and intellectual property.

The talks that started Monday were the first face-to-face meeting since Trump and his Chinese counterpart, Xi Jinping, agreed Dec. 1 to suspend further punitive action against each other's imports for 90 days while they negotiate over the fight sparked by American complaints that Beijing steals or pressures companies to hand over technology.

Washington is pressing Beijing for changes, including rolling back plans for government-led creation of Chinese global leaders in robotics and other fields. Europe, Japan and other trading partners echo U.S. complaints that those violate Beijing's market-opening obligations.

Chinese officials have suggested Beijing might alter its industrial plans but reject pressure to abandon what they consider a path to prosperity and global influence.

Neither side has given any indication that its basic position has changed. Economists say the 90-day window is too short to resolve all the conflicts between the biggest and second-biggest global economies.

"Even if a deal is cobbled together, the more strident trade hawks in the White House and Trump may not sign off," Mizuho Bank's Vishnu Varathan said in a report.

Beijing has tried to defuse pressure for more sweeping change by offering concessions including purchasing more American soybeans, natural gas and other exports. That might offer relief to rural areas that supported Trump in the 2016 election and were targeted by Chinese tariffs.

However, the official Trump put in charge of the talks, Trade Representative Robert Lighthizer, has focused on pressing Beijing to scrap or change rules Washington says block market access or improperly help Chinese companies.

Those include initiatives such as "Made in China 2025," which calls for state-led creation of Chinese global champions in robotics, artificial intelligence and other fields. Washington, Europe, Japan and other trading partners say those violate Beijing's market-opening obligations. American leaders also worry they might erode U.S. industrial leadership.

U.S. companies also want action on Chinese policies they complain improperly favor local companies. Those include subsidies and other favors for high-tech and state-owned industry, rules on technology licensing and preferential treatment of domestic suppliers in government procurement.

The U.S. demands strike at the heart of a state-led development model the ruling Communist Party sees as a great success over the past three decades and is reluctant to give up.

"These issues are much more difficult to solve immediately but are, frankly, much more compelling to U.S. companies," said Jake Parker, vice president for China operations of the U.S.-China Business Council, which represents U.S. companies that do business with China.

Beijing also faces pressure from the European Union over technology. The 28-nation trade bloc filed its own challenge in the World Trade Organization in June against Chinese licensing rules it said hamper the ability of foreign companies to protect and profit from their technologies.

Companies that have been disappointed by Beijing's failure or delays in carrying out commitments want an enforcement mechanism with "some kind of penalty for not doing what they promised," said Parker.

"That's not something that's going to be done by March," said Parker. "It's probably going to take a little longer."

For its part, Beijing is unhappy with U.S. export and investment curbs, suggesting it might demand concessions.

Chinese officials complain about controls on dual-use technology, with possible military applications. They say China's companies are treated unfairly in national security reviews of proposed corporate acquisitions, though almost all deals are approved unchanged.

This week's talks went ahead despite tension over the arrest of a Chinese tech executive in Canada on U.S. charges related to violations of trade sanctions against Iran.

The U.S. delegation was led by one of Lighthizer's deputies, Jeffrey D. Gerrish. It included agriculture, energy, commerce, treasury and State Department officials.

Trump imposed tariff increases of up to 25 percent on $250 billion of Chinese imports. China responded by imposing penalties on $110 billion of American goods, slowing customs clearance for U.S. companies and suspending issuing licenses in finance and other businesses.

Chinese exports to the United States held up despite the tariff hikes, but that was due partly to exporters rushing to fill orders before any more increases hit. Forecasters expect U.S. orders to slump this year.

Cooling economic growth in both countries is increasing pressure to reach a settlement.

Car and property sales have slumped as Chinese growth fell to a post-global crisis low of 6.5 percent in the quarter ending in September.

The U.S. economy grew at an annual rate of 3.4 percent in the third quarter but surveys show consumer confidence weakening.

Categories / Government, International

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