The Trump administration has unveiled a list of hard-line demands as part of trade talks with China. The demands threaten to sabotage any hope for a diplomatic solution to the potential trade conflict between the US and the Asian country. The US insists that China must reduce its trade deficit with the US by at least $200 billion over the next 2 years. A source from the White House confirmed the authenticity of the leaked documents outlining these new demands.
The US and China have been engaged in trade talks for the last two days in a bid to resolve the trade issue. It’s not yet clear what the talks achieved but it seems that the US is not backing down. President Donald Trump said on Friday in Washington that his administration must bring “fairness” in trade between the US and China. Trump had promised during his campaign that one of the key priorities under his administration would be to reduce the trade deficit between the two countries that currently stands at $337 billion.
The trade tensions between two of the largest economies in the world have rattled financial markets in the US and overseas. The White House slapped new tariffs on Chinese steel and aluminum imports in March. The President also threatened to increase the tariffs to the tune of $150 billion for other Chinese products entering the US. China responded by slapping tariffs of its own worth about $50 billion. The tariffs largely affected US agricultural products and aircraft.
The tension decreased when China’s President Xi Jinping confirmed that China would open its auto market for US carmakers. President Trump, on the other hand, toned down on the threat of further tariffs. The White House also sent a high delegation of US officials to China in order to seek a diplomatic solution for the potential trade war. The delegation included high profile members of the Trump administration such as Treasury Secretary Steven Mnuchin, Commerce Secretary Wilbur Ross, and Peter Navarro, Trump’s trade adviser and a strong critic of China’s trade practices.
The two-day talks in Beijing resolved that it was in the best interest of both countries to avoid any escalation of the current trade tensions to a full blown trade war. Commerce officials from China also said that the two countries had established a mechanism to help resolve the issues on the table. However, there were still a lot of differences.
The US has also accused China of stealing US intellectual property. China has rejected these accusations. As part of these latest trade talks, the US wants to convince China not to retaliate against the current trade measures being pursued by the Trump administration including the trade tariffs. The White House wants China to agree not to target US farmers or the agricultural produce that’s exported to China from the US. China is a huge market for US-produced soybeans and other agricultural products. Most of these products are produced in perceived Trump’s base and any fall out in trade between the two countries could significantly hurt President Trump politically.