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China insists on tariff rollback

By Wang Cong and Yang Kunyi (Global Times)    10:15, November 15, 2019

Trade talks with US continue but breakdown can’t be ruled out: analysts

Beijing on Thursday reiterated an earlier demand for both sides in the China-US trade talks to simultaneously roll back some existing tariffs on each other's products as part of a highly anticipated interim trade agreement, while indicating negotiations are continuing, despite the return of tough rhetoric out of Washington.

However, given the unreasonable demands and fresh threats from US officials, the risks of the trade negotiations leading to no phase-one trade deal cannot be ruled out, if China sees no meaningful compromise from the US, analysts noted.

"China has repeatedly stressed that the trade war started with imposing additional tariffs and therefore should end with the cancellation of additional tariffs," Gao Feng, a spokesperson for the Chinese Ministry of Commerce, told a press briefing in Beijing on Thursday.

Gao further noted that the scale of the tariffs removed should "fully reflect the significance of the China-US phase one trade agreement, which should be appraised by both sides." He added that the two sides are conducting in-depth discussion over the thorny issues.

Chinese officials have publicly demanded the removal of some tariffs as a precondition for the phase one trade deal, but Gao's comments on Thursday suggest that the issue remains unsolved in the ongoing trade talks, analysts said.

"For China, tariffs must be removed. Otherwise, there is no meaning in reaching a trade agreement," Song Guoyou, director of Fudan University's Center for Economic Diplomacy, told the Global Times on Thursday.

Song, who closely follows the negotiations, said that tariffs already imposed should be rolled back.

Gao's comment on Thursday came as US officials appeared to be raising their demands and renewing threats, despite clear progress seen in the negotiations for the phase one deal. US President Donald Trump has threatened to substantially raise tariffs on Chinese goods, if a deal was not reached.

US officials have also demanded that China purchase $40-$50 billion of US agricultural goods each year and refloated demands over so-called technology transfers and enforcement mechanisms, according to some US media reports.

Risk of collapse

Such threats and increased demands show no sincerity from the US for reaching a trade agreement and pose a serious risk that the negotiations could collapse, according to Chinese analysts.

"Making additional demands could create obstacles for and disrupt the negotiations," said Song, adding that the US seems to show the signs of backpedaling, as it has many times throughout the 17-month trade war.

However, the overall direction for a phase one deal remains positive, given the eagerness on both sides to end the costly trade war, according to Li Yong, deputy chair of the expert committee of the China Association of International Trade.

"Both sides are still moving forward with a serious attitude," he told the Global Times on Thursday.

Though Chinese and US officials have not announced more face-to-face negotiations, they have been keeping in close contact, possibly over the phone.

Gao, the spokesperson, said on Thursday that China is willing to work with the US to create an "atmosphere" for the two sides to reach a phase one deal and address each other's core concerns based an equal footing and mutual respect.

China on Thursday lifted a ban on US poultry imports imposed in 2015, paving the way for hundreds of millions dollars worth of US meat exports to China. The US exported $390 million worth of poultry to China in 2014, before the ban was imposed.

However, if the US does not respond to goodwill gestures from China with concrete actions and overplays its hand, the trade negotiations could become very difficult, analysts said.

"We cannot rule out any change to the direction of the trade talks," Li noted.

(For the latest China news, Please follow People's Daily on Twitter and Facebook)(Web editor: Liang Jun, Bianji)

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