Abu Dhabi, UAEMonday 20 May 2019

China sets terms for trade deal and Trump sets a one-month deadline

Vice Premier Liu He details three differences between the two countries

US Treasury Secretary Steve Mnuchin, centre, and US trade representative Robert Lighthizer, third from left, and Chinese Vice Premier Liu He, left, speak together as Liu He departs the Office of the US Trade Representative in Washington on May 10. AP
US Treasury Secretary Steve Mnuchin, centre, and US trade representative Robert Lighthizer, third from left, and Chinese Vice Premier Liu He, left, speak together as Liu He departs the Office of the US Trade Representative in Washington on May 10. AP

China for the first time made clear what it wants to see from the US in talks to end their trade war, laying bare the deep differences that still exist between the two sides.

In a wide-ranging interview with Chinese media after talks in Washington ended Friday, Vice Premier Liu He laid out three differences between the two countries, which underscore the work still to be done if an accord is to be reached between the world’s two biggest economies.

One of those is over tariffs, Mr Liu said, according to a transcript of the Q&A published by Phoenix, a Hong Kong-based television station that is close to Beijing. China believes that tariffs were the genesis of the trade dispute, and that if both sides wanted to reach an agreement, then all tariffs must be eliminated, Mr Liu said.

The second is about procurement, on which an initial consensus was reached between the leaders of the two countries in Argentina late last year. The two sides now have differing views on the volumes, Mr Liu said. The third is over how balanced the text of the draft agreement should be, he said.

Mr Liu said both sides agreed to keep talking despite what he called “some temporary resistance and distractions’,’ and to hold future meetings in Beijing. He dismissed the idea that talks had broken down. “It’s normal to have hiccups during the negotiations. It’s inevitable.” China hasn’t yet detailed how it will retaliate to the latest increase in tariffs.

Mr Liu also struck a note of defiance, Bloomberg reported. “For the interest of the people of China, the people of US and the the people of the whole world, we will deal with this rationally,’ the vice premier said. “But China is not afraid, nor are the Chinese people,” adding that “China needs a cooperative agreement with equality and dignity”.

In a statement late Friday, US Trade Representative Robert Lighthizer said the administration would release details of its plans for tariffs on roughly $300 billion in imports from China on Monday, setting the process in motion for Mr Trump to deliver on his latest threat, according to Reuters.

President Donald Trump’s administration told China it has a month to seal a trade deal or face tariffs on all its exports to the US.

China and the US are reportedly split on issues in the trade negotiations including whether all additional tariffs should be removed, according to state media.

The two countries also have different views on the amount of purchases to be carried out by China, which the commentary said should be “in line with real demand”, Xinhua News Agency wrote in a commentary published Saturday.

China has previously offered to increase the US goods it buys in order to close the trade imbalance between the two nations. There are also differences on the “balance” of the text, the commentary said.

The article said “fighting while talking” will likely be the new normal in the negotiations, and China will stay patient and be ready to deal with all kinds of risks. “An equal footing” would be the underlying guarantee for the final agreement, it said.

Updated: May 12, 2019 11:55 PM

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