BOFIT Viikkokatsaus / BOFIT Weekly 2019/31
Little specific information has been forthcoming about the half-day talks held in Shanghai on Wednesday (Jul. 31) between the lead negotiators for China and the United States. Discussions apparently focused on boosting Chinese purchases of American farm products and the concessions from the US needed to make that happen. The parties said the next round of talks would take place in the US in September.
The same themes were front and centre at the side-line talks between China and the US at the Osaka G20 summit in June. At that time, president Donald Trump promised to refrain from imposing further tariffs on Chinese goods as long as talks continued. While the parties returned to the negotiation table after breaking off talks in May due to new tariff hikes, the situation is difficult. This is evidenced by the fact that the latest talks focused on very narrow aspects of trade relations, even if the US claimed that also such major topics as forced technology transfers, intellectual property protections and technical barriers to trade were discussed.
Given the bitter public exchanges between the Trump and Xi administrations during the talks, the prospects of quick resolution of trade differences seem unlikely. The uncertainty surrounding the talks has not been helped by the approaching US presidential election.
President Trump’s announcement of more tariffs by tweet on Thursday (Aug. 1) have further muddied the waters. A 10 % tariff on rest of imports from China (300 billion dollars) is scheduled to go into effect on September 1.