Economy

China trade talks underway as Huawei tensions grow

China trade talks underway as Huawei tensions grow

Trump indicated this week he was open to extending a trade truce beyond March 1 depending on progress made in Beijing this week.

Both the U.S. and China have imposed more and more tariffs on billions of dollars worth of each other's goods over the a year ago and America has signalled it is prepared to increase duties to 25 percent from 10 percent if a deal cannot be reached.

Mnuchin, along with U.S. Trade Representative (USTR) Robert Lighthizer, arrived in the Chinese capital on Tuesday for meetings with Vice Premier Liu He, the top economic adviser to Chinese President Xi Jinping, on Thursday and Friday.

Chinese President Xi Jinping plans to meet with top US officials in Beijing this week, a report in the South China Morning Post said Wednesday, bolstering hopes for the talks and markets in Asia. China's trading partners say those violate its market-opening obligations and some in America worry they might erode USA industrial leadership.

China's imports, however, continued to fall in January, down 1.5 percent from a year earlier, though at a slower pace than a 10.2 percent decline forecast by Bloomberg News.

Trump added he expects to meet with Xi to close the deal at some point.

Washington accuses Beijing of unfairly raising barriers to worldwide competition and stealing proprietary company secrets to boost the technological expertise of its firms. The dispute has spread to include Chinese industry development plans, cyberspying and the countries' lopsided trade balance.

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Trump raised tariffs in July over complaints Beijing steals or pressures companies to hand over technology.

The Chinese government has offered few details about the state of negotiations this week.

The letter from the Democratic senators reminded Trump of the main Chinese violations identified by Lighthizer's investigation past year, including unfair investment restrictions and licensing practices that pressure U.S. companies into turning over technology to Chinese firms, state-driven acquisitions of USA technology firms and state-sponsored cyber theft of American trade secrets. But business groups and foreign governments point to rules they say compel companies to disclose trade secrets or share technology with state-owned partners. But it's unclear whether that will satisfy Washington and other governments that complain the system is created to extract technology from foreign companies and to use official industrial standards to shield Chinese enterprises from competition.

Trump told reporters in the Oval Office on Wednesday that preliminary talks in Beijing were "going along very well", Bloomberg reported.

"That fact that China's economy is showing some signs of improvement might mean Beijing will be less susceptible to pressure from the U.S. regarding the trade dispute".

And what if Trump goes ahead with a March 2 tariff hike to step up pressure on Beijing? "It would be a awful cost for American consumers and a bad hit to the global economy".