{"id":192161,"date":"2018-12-03T03:01:26","date_gmt":"2018-12-03T08:01:26","guid":{"rendered":"https:\/\/canadianinquirer.net\/v1\/?p=192161"},"modified":"2018-12-03T03:01:26","modified_gmt":"2018-12-03T08:01:26","slug":"us-china-trade-cease-fire-does-little-to-narrow-differences","status":"publish","type":"post","link":"https:\/\/canadianinquirer.net\/v1\/2018\/12\/03\/us-china-trade-cease-fire-does-little-to-narrow-differences\/","title":{"rendered":"US China trade cease fire does little to narrow differences"},"content":{"rendered":"
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The outcome of the weekend Xi-Trump meeting in Argentina was \u201cas good as we could have expected,\u201d the chairman of the American Chamber of Commerce in China, William Zarit, said in a statement. (File Photo Chamber of Commerce of the United States of America<\/a>)<\/figcaption><\/figure>\n

BEIJING \u2014 A U.S.-Chinese cease fire on tariffs gives jittery companies and investors a respite but is no sign the two sides have changed stances in a war over Beijing’s technology ambitions that threatens to chill global economic growth.<\/p>\n

On Monday, Asian stock markets welcomed President Donald Trump’s agreement to postpone U.S. tariff hikes on Chinese goods for 90 days while the two sides negotiate. Chinese President Xi Jinping promised in exchange to buy more American exports.<\/p>\n

China’s main market index was up 2.7 per cent, while Tokyo rose 1.0 per cent.<\/p>\n

The outcome of the weekend Xi-Trump meeting in Argentina was \u201cas good as we could have expected,\u201d the chairman of the American Chamber of Commerce in China, William Zarit, said in a statement.<\/p>\n

There was no sign, however, of progress in their core dispute: American pressure on Beijing to roll back industry plans that Washington says are based on theft and violate Chinese market-opening obligations.<\/p>\n

\u201cIt’s impossible for China to cancel its industry policies or major industry and technology development plans,\u201d said economist Cui Fan of the University ofInternational\u00a0Business and Economics in Beijing.<\/p>\n

Trump’s promise gives Xi political room to negotiate after Beijing said earlier talks were impossible while Washington \u201cholds a knife\u201d of tariff threats to Beijing’s throat. But both leaders still face a complicated mix at home of economic nationalists, free trade advocates and other conflicting forces.<\/p>\n

Without progress, Trump will face renewed pressure from hardliners to resume escalating the tariff fight.<\/p>\n

Trump imposed a tariff hike of 25 per cent on $50 billion of Chinese imports in July over complaints Beijing steals or pressures companies to hand over technology. Trump hit an additional $200 billion of Chinese goods with a 10 per cent tariff that had been due to rise to 25 per cent on Jan. 1.<\/p>\n

China retaliated by raising its own charges on U.S. imports.<\/p>\n

The American complaints strike at the heart of a development strategy Chinese leaders see as a route to prosperity and global influence.<\/p>\n

They have offered to alter details but reject pressure to discard blueprints such as \u201cMade in China 2025,\u201d which calls for state-led creation of Chinese champions in robotics and other fields.<\/p>\n

Those are \u201ccentral to Xi’s core agenda of making China an innovation superpower,\u201d Michael Hirson, Jeffrey Wright and Paul Triolo of Eurasia Group said in a report. It is linked to \u201cintense geopolitical competition\u201d with Washington.<\/p>\n

Negotiators face a daunting agenda and a 90-day window to produce progress.<\/p>\n

The weekend agreement indicates \u201cdialogue will intensify,\u201d but China will need to \u201cagree to very substantial measures\u201d to reach an agreement, said Rajiv Biswas of IHS Markit in a report.<\/p>\n

Cui put the odds of an agreement at \u201chigher than 50 per cent\u201d but said he had no idea how long that might take.<\/p>\n

Beijing previously agreed to narrow its trade gap with the United States by purchasing more soybeans, natural gas and other exports but scrapped that after Trump’s tariff hikes went ahead. Xi’s weekend agreement is along similar lines, pledging to buy a \u201cnot yet agreed upon, but very substantial amount of agricultural, energy, industrial\u201d and other American exports.<\/p>\n

Xi’s government has announced a drumbeat of changes this year that Washington and other trading might have welcomed at another time as progress. But they have been overshadowed by the tariff battle.<\/p>\n

While Beijing retaliated for U.S. tariff hikes by imposing penalty charges on American soybeans, autos and other goods, it has cut duties on factory machinery and other imports from other countries.<\/p>\n

The government also has promised to ease limits on foreign ownership of automakers, insurance ventures and other companies.<\/p>\n

Business groups welcome those changes but complain over other rules limiting access to markets including finance, logistics and agricultural technology.<\/p>\n

Companies want a \u201cgenuine response to those concerns, with measurable goals,\u201d Kenneth Jarrett, the president of the American Chamber of Commerce in Shanghai, said in an email.<\/p>\n

Threats of additional U.S. penalties loom in the background.<\/p>\n

Trump has said he might consider raising tariffs on all remaining Chinese imports, or about $267 billion of goods. U.S. Trade Representative Robert Lighthizer complained last week China’s 40 per cent tariffs on imports of U.S.-made autos are higher than Washington’s 27.5 per cent rate for Chinese vehicles and said he was looking at ways to equalize U.S. duties.<\/p>\n

Trump tweeted late Sunday that China promised to drop the 40 per cent auto tariffs. There was no immediate response Monday from the Chinese Commerce Ministry about whether Beijing had made such a pledge.<\/p>\n

China has its own demands. Beijing is unhappy with U.S. limits on exports of \u201cdual use\u201d technology with possible military applications. Xi’s government complains Chinese companies are treated unfairly in American security reviews of proposed corporate acquisitions, even though nearly all deals are approved unchanged.<\/p>\n

\u201cChina hopes the United States will treat Chinese companies equally and ease restriction on foreign investment and export of high-tech products to China,\u201d said Song Lifan, an economist at Renmin University in Beijing.<\/p>\n

A possible measure of progress will be whether Beijing offers \u201cmeaningful concessions\u201d on technology, said Hirson, Wright and Triolo of Eurasia Group.<\/p>\n

Without that, hardliners in Washington \u201cwill urge Trump to resume escalation,\u201d they said. He is too committed to confronting Beijing over technology \u201cto easily back away from those issues.\u201d<\/p>\n

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