President Donald Trump offered an upbeat assessment of U.S.-China trade talks and said he would meet at the White House on Friday with the leader of the Chinese negotiating team.
Expectations were low that the negotiations would do much to resolve a 15-month trade battle that is weighing on the global economy.
But as the first of an expected two days of talks wrapped up Thursday, Trump told reporters at the White House, “We’re doing very well … We’re going to see them tomorrow, right here, and it’s going very well.”
Stocks surged on the news with the Dow Jones Industrial Average rising 400 points, or 1.6%, at one point. It was still up 397 points, or 1.5% at 10:20 a.m. EDT. The S&P 500 was up 45 points, or 1.5%, and the Nasdaq composite had rocketed up 138 points, or 1.7%, around the same time.
Chinese Vice Premier Liu He is leading the delegation in the 13th round of negotiations with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin.
The world’s two biggest economies are deadlocked over U.S. allegations that China steals technology and pressures foreign companies to hand over trade secrets as part of a sharp-elbowed drive to become a world leader in advanced industries such as robotics and self-driving cars.
Under Trump, the United States has slapped tariffs on more than $360 billion worth of Chinese imports and is planning to hit another $160 billion Dec. 15. That would extend import taxes to virtually everything China ships to the United States. China has hit back by targeting about $120 billion in U.S. goods, focusing on farm products.
The high cost of the tariffs and uncertainty over when and how the trade war will end have taken an economic toll, especially on manufacturing companies. A private survey last week found that U.S. factory output had dropped to its lowest level since 2009, when the economy was in the grips of a deep recession.
Liu met Thursday with leaders of the U.S. Chamber of Commerce and the U.S.-China Business Council. Liu told them the Chinese negotiators “come with great sincerity” and were ready to discuss the trade balance, market access and investor protection, the official Xinhua News Agency reported.
The report made no mention of willingness to discuss Chinese industrial and technology policy, a major irritant that sparked the tariff war.
It wasn’t clear whether that was intended to signal Beijing was digging in on resisting pressure to roll back plans for government-led development of global competitors in robotics, electric cars and other technology. Washington, Europe and other trading partners complain those violate China’s market-opening commitments and are based on stealing or pressuring companies to hand over business secrets.
“Both sides have been losing, and so has the global economy,” said Myron Brilliant, head of international affairs at the U.S. Chamber of Commerce.
Brilliant, who spoke with both delegations, sounded optimistic about the chances of progress, noting that Beijing has stepped up purchases of U.S. soybeans in a goodwill gesture. He said he hoped a productive meeting would persuade the Trump administration to call off or postpone plans next Tuesday to raise tariffs on $250 billion of Chinese imports from 25% to 30%.
“We all know we can’t afford a further escalation of the trade war,” Brilliant said.
Still, Beijing has been reluctant to make the kind of substantive policy reforms that would satisfy Washington. Doing so likely would require scaling back the Chinese leaders’ aspirations to technological competitiveness they see as crucial to their country’s future prosperity.
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