Prospects For US-China Trade Deal Ease Tensions

Prospects For US-China Trade Deal Ease Tensions

Trump's statement comes amid the negotiations between the world's two largest economies after potential tariffs on both sides raised fears of a trade war, even as some tensions have eased over signs of some possible progress.

In another missive referring to trade talks with China, he said that, while the discussions were proceeding nicely, "in the end we will probably have to use a different structure". The thawing trade tensions between the world's two biggest economies, which included increased Chinese imports of American agricultural and energy products, got a further boost with the USA working on a reprieve for telecommunications group ZTE and China reducing tariffs on vehicle imports.

"What we should be focusing on is reducing tariffs, reducing kind of non-tariff barriers, so there are all sorts of regulatory issues which obstruct USA exports to China", he said.

After high-level talks last week in Washington, Beijing agreed in a joint statement with the U.S.to "substantially reduce" America's trade deficit with China.

"We can do a 301, where we dont need China, where we can just say, Look, this is what we want. this is what we think is fair". Katainen said any imposition of higher auto tariffs were still far off and said "we don't expect this to further complicate the solution" to the overall trade issues between Washington and Brussels.

Trade tensions between the USA and China, in particular, have shaken financial markets and alarmed business executives. "Anything that is outside the area of free trade and lower barriers and symmetrical rules is not favourable to European trade", said Francois Godement, Director of Asia & China programme at the European Council on Foreign Relations in Paris.

The world's leading democracy, the United States, is looking increasingly like the world's biggest and oldest surviving autocracy, China.

"Specifically with regard to soybeans, we are hopeful for a solution where Chinese importers can buy USA soy with confidence that there will be no negative impacts from tariffs or other trade barriers".

Mnuchin is said to be following a strategy of setting targets industry by industry, an easy first win being to ramp up exports of energy by some $50-60 billion. Without even applying the tariffs, Chinese orders of USA soybeans have virtually stopped in the past few months, a well-timed blow to Mr. Trump and the Republicans fighting to win coming elections in those states. For example, China is desperate to lift the seven-year ban on Chinese telecommunications company ZTE sourcing United States parts, a ban which it says jeopardizes the future of the company and its 70,000 employees. In an interview with Bloomberg, Dan DiMicco, the former chief executive of the steel company, Nucor, said it did not "make sense" to have the treasury secretary negotiating trade policy, as this was the U.S. trade representative's job. Soybeans account for $14 billion of USA exports to China.

The president's misgivings open the prospect that a trade war Treasury Secretary Steven Mnuchin had declared "on hold" is at risk of resuming.

"The market is pricing in a 90 percent chance that this whole trade war and tariff idea is going to come and go without it being implemented", said James Cordier, president and head trader of OptionSellers.com, an investment firm in Tampa, Florida.

Those worries included fears that the uncertainty raised by US involvement in a trade war could cause companies to postpone their plans to boost capital spending to expand and modernize their facilities.

China has apparently scored a victory in a recent tariff standoff with the US. "It was this administration that closed it", Trump told reporters at the White House.

Schumer earlier said that if the administration allowed ZTE to survive it would be a "signal to President Xi that we are weak negotiators".

In early March, Trump unveiled a 25 percent duty on steel imports and 10 percent charge on aluminum imports, essentially targeting suppliers such as China.

Trump has frequently lambasted China's high import duties on foreign cars.

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