WASHINGTON (Reuters) – US and China's top trade negotiators will meet Thursday for the first time since late July to try to find a way out of a 15-month trade war as new irritants between the world's two largest economies threatened hope of progress.
FILE PHOTO: US Trade Representative Robert Lighthizer gestures to Secretary of State Steven Mnuchin while chatting with Chinese Deputy Prime Minister Liu He before posing for a family photo at Xijiao Conference Center in Shanghai, China, July 31, 2019. Ng Han Guan / Pool via REUTERS / File Photo
Chinese Deputy Prime Minister Liu He, United States Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin will try to limit differences enough to avoid a planned October 15 customs increase of $ 250 billion in Chinese goods.
But the atmosphere around the conversations was captured by the U.S. Commerce Department's decision on Monday to blacklist 28 Chinese public security agencies, technology and surveillance companies, citing human rights violations by Muslim minority groups in China's Xinjiang province. A day later, the US State Department imposed visa restrictions on Chinese authorities related to the Xinjiang case.
If negotiations break down again by December 15, almost all Chinese goods imports to the United States – more than $ 500 billion – could be subject to penalties in the dispute that erupted during US President Donald Trump's time in office.
Secretary of Commerce Wilbur Ross said in Sydney on Thursday that the tariffs were working, forcing Beijing to take into account US concerns about its trade practices.
"We do not love tariffs, we actually prefer not to use them, but after years of discussion and no action, tariffs finally force China to take our concerns into account," Ross said in comments prepared for delivery on an official visit in Australia.
Although some media outlets suggested that both sides are considering a "temporary" agreement that would suspend scheduled additional US tariffs in exchange for further purchases of US farm products, Trump has repeatedly rejected this idea, insisting he wants a " big deal "with Beijing taking up the core intellectual property.
Trump spoke to reporters in Washington on Wednesday, saying, "If we can make a deal, we're going to make a deal, it's a very good chance."
"In my opinion, China wants to make a deal more than I do," Trump added.
The two sides have been at odds with the United States' demand that China improve protection of US intellectual property, end cyber theft and forced transfer of technology to Chinese firms, dampening industrial subsidies and increasing US companies' access to largely closed Chinese markets.
But Chinese officials, surprised and upset by the US blacklist of Chinese companies, including video surveillance equipment manufacturer 002415.SZ ) along with the suspension of US visas for some Chinese authorities told Reuters that Beijing had lowered expectations of significant progress from the talks.
"I have never seen China respond with concessions to anyone casting the gap this way, "said Scott Kennedy, a Chinese trade expert at the Center for Strategic Duck International Studies in Washington. "It suggests to me that the United States may have decided that progress was impossible, so everyone just goes through the motions."
Other flashpoints that have occurred in recent days include China's swift action to cut the company's ties to the National Basketball Association over an official's tweet in support of Hong Kong pro-democracy protesters.
But in a possible easing of the tension, The New York Times reported that the Trump administration will soon issue licenses that allow some US companies to sell non-sensitive goods to China's top telecommunications manufacturer Huawei Technologies.
The report cited unnamed persons familiar with the case. A spokesman for the Department of Commerce said the agency had not received any such direction. Huawei since May has been on the same blacklist affecting Hikvision because the United States says the company can spy on customers – a claim Huawei denies.
Reporting by David Lawder; Editing by Simon Cameron-Moore