China Retracted Commitment to End US IP Theft, Forced Technology Transfers

Daniel Fowler
May 10, 2019

Robert Lighthizer, the chief United States trade negotiator, is scheduled to meet at 5pm on Thursday (9am Friday, NZT) with Chinese Vice Premier Liu He to continue negotiations aimed at a comprehensive trade deal. Officials did not speak to reporters as they left the talks. He appealed to Washington to avoid more tariff hikes, saying they are "not a solution" and would harm the world. "We'll see. It was their idea to come back". "Otherwise, I don't think Liu would be coming".

London stocks were poised for gains at the open on Friday, with investors set to take US President Trump's lifting of tariffs on $200bn of Chinese goods in their stride. The duties apply to cargoes leaving China after 12.01 am EDT (0401 GMT) Friday.

Since early this year, the trade talks have worked to resolve Washington's grievances of industrial theft, massive state intervention in markets and a yawning trade deficit.

But due to a quirk in the implementation of the higher tariffs, products already on ships headed for US ports before midnight will only pay the prior 10 percent duty rate, US Customs and Border Protection explained.

The United States is demanding Beijing make sweeping changes to its trade and regulatory practices, including protecting USA intellectual property from theft and forced transfers to Chinese firms, curbs on Chinese government subsidies and increased American access to China's markets. We can't have that.

The US team met with Trump late Thursday night to brief him and "agreed to continue discussions tomorrow morning at USTR", the White House said in a statement. After Trump announced the tariff hike on Sunday, the S&P 500 has dropped every day. Now he's publicly playing hardball with the world's second largest economy by threatening new tariffs that will kick in Friday, as if striking a unilateral deal is all the American worker needs in the years ahead.

In response, Biden's deputy campaign manager Kate Bedingfield on Twitter criticized Trump, saying United States farmers, small business owners and consumers are the ones hit by the tariff battle.

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But on Sunday Mr Trump said on Twitter that the U.S. would hike tariffs on $US200b worth of Chinese goods this week and could introduce fresh tariffs. "I just received it", Trump said.

While the USA president said a trade deal was still possible - adding that he had received a "very beautiful" letter from Chinese President Xi Jinping - he repeated his warning.

'China will not capitulate to any pressure, and we have the determination and ability to defend our own interests'. Data released Thursday showed the U.S. goods trade deficit with China shrank to its smallest level in five years in March, which could further embolden Trump as he escalates the trade war with Beijing.

The view that Trump is relying on the strength of the US economy to outlast China in a trade war is shared by a range of banks and analysts and comes in large part from Trump's own public remarks.

Earlier on Thursday in Beijing, China appealed to the United States to help salvage the deal. "If the USA tariff measures are implemented, China will have to take necessary countermeasures".

"The U.S. side has given many labels recently, "backtracking", "betraying" etc". -China trade talks with China's Vice Premier Liu He (R) in the Eisenhower Executive Office Building in Washington, D.C., February 21, 2019. The two sides could end negotiations, given they are so far apart. From China's perspective, if they can avoid hard commitments on the structural issues mentioned, then they're happy to go along with it too.

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