The United States and China are set to relaunch trade talks this week after a two-month hiatus, but a year after their trade war began there is little sign their differences have narrowed.
After meeting with Chinese President Xi Jinping in Japan just in late June, U.S. President Donald Trump agreed to suspend a new round of tariffs on $300 billion worth of imported Chinese consumer goods while the two sides resumed negotiations.
Trump said then that China would restart large purchases of U.S. agricultural commodities, and the United States would ease some export restrictions on Chinese telecom equipment giant Huawei Technologies [HWT.UL].
But sources familiar with the talks and China trade watchers in Washington say the summit did little to clear the path for top negotiators to resolve an impasse that caused trade deal talks to break down in early May.
A U.S. official said last week the discussions were expected to resume with a phone call between U.S. Trade Representative Robert Lighthizer, Chinese Vice Premier Liu He and Treasury Secretary Steven Mnuchin.
A USTR spokesman said the call was expected this week, but gave no further details.
The United States is demanding that China make sweeping policy changes to better protect American intellectual property, end the forced transfer and theft of trade secrets and curb massive state industrial subsidies. At stake, U.S. officials say, is dominance of the high-tech industries of the future, from artificial intelligence to aerospace.
“We’ve had a change in atmospherics,” said Derek Scissors, a China expert at the American Enterprise Institute, a business-oriented Washington think tank. “While this is great for markets, the administration has not said one specific thing about how we’re unstuck.”
Scissors, who has at times consulted with Trump administration officials, said that both sides got what they wanted out of the summit — a lowering of the temperature and the avoidance of new tariffs that would have been painful for both sides.
“The pressure for one side to give into the other is diffused right now. I expect this to drag out for months,” Scissors added.