BOFIT Viikkokatsaus / BOFIT Weekly 2019/02

In trade talks in Beijing held January 7­–9, the two countries sought solutions to their inflamed commercial relations. The talks, originally intended to last two days, were extended a day.

No breakthrough was announced. The US reported that the talks had reviewed potential measures to create a level playing field for trade, increased reciprocity and reduced trade imbalances. Topics covered included mandatory technology transfers, intellectual property issues, various trade barriers and cybersecurity. China’s propensity to not act on promises made on paper was also raised. The Chinese just said that the discussions were positive and should continue.

If the talks fail to resolve the trade impasse by early March, the US has threatened to raise the level of punitive tariffs from 10 % to 25 % on Chinese products added to the 10 % tariff list last September. The value of imports affected by the hike were worth roughly 200 billion dollars in 2017, or about 40 % of US goods imports from China. In addition, the US last summer imposed a 25 % punitive tariff on imported Chinese goods with estimated value of 50 billion dollars in 2017. China has responded to the additional tariffs by imposing its own counter-tariffs on American products.