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U.S. NEWS Monday 21 May 2018

US, China putting trade war on hold after progress in talks

By MARTIN CRUTSINGER Trade analysts were not sur- the Chinese markets. munications company of
and PAUL WISEMAN prised that China refused Last month, the administra- misleading U.S. regulators
WASHINGTON (AP) — The to agree to a numerical tion proposed tariffs on $50 after it settled charges last
United States and China target for cutting the trade billion of Chinese imports to year of violating sanctions
are pulling back from the gap, but they said the protest the forced technol- against Iran and North Ko-
brink of a trade war af- talks probably were more ogy transfers. Trump later rea. The ban amounted to
ter the world's two big- successful in easing trade ordered Lighthizer to seek a death sentence for ZTE,
gest economies reported tensions. "The Trump ad- up to an additional $100 which relies heavily on U.S.
progress in talks aimed at ministration seems eager billion in Chinese products parts, and the company
bringing down America's to engineer at minimum a to tax. announced that it was
massive trade deficit with temporary peace with Chi- China responded by tar- halting operations. A week
Beijing. na to ensure a smooth run- geting $50 billion in U.S. ago, Trump tweeted that
"We are putting the trade up to the Kim-Trump summit products, including soy- he was working with Chi-
war on hold," Treasury Sec- in June," Cornell University beans — a shot at Trump nese President Xi Jinping to
retary Steven Mnuchin said economist Eswar Prasad supporters in America's put ZTE "back in business,
Sunday. said, referring to the June heartland. The prospect of fast." Media reports sug-
After high-level talks Thurs- 12 meeting scheduled be- an escalating trade war gested that the U.S. was of-
day and Friday in Wash- tween President Donald has shaken financial mar- fering to swap a ZTE rescue
ington, Beijing agreed in a Trump and North Korean kets and alarmed business for an end to proposed
joint statement with the U.S. leader Kim Jong Un. leaders. Chinese tariffs on U.S. farm
to "substantially reduce" If there is success in the In a separate controversy, products. Mnuchin and
America's trade deficit with U.S.-China discussions, ana- the Commerce Depart- Graham appeared on
China, but did not com- lysts suggest it likely would ment last month blocked "Fox News Sunday," Warner
mit to cut the gap by any involve the countries' presi- China's ZTE Corp. from im- spoke on CNN's "State of
specific amount. The Trump dents this fall before the porting American com- the Union" and Kudlow was
administration had sought November elections. ponents for seven years, interviewed on ABC's "This
to slash the deficit by $200 "Part of the good news for accusing the telecom- Week."q
billion. markets: As long as both
Still, Mnuchin said the sides continue to be 'con-
two countries had made structively' engaged, im-
"meaningful progress" and position of additional tariffs
that the administration has by either side is very unlike-
agreed to put on hold pro- ly," analysts at investment
posed tariffs on up to $150 management firm Ever-
billion in Chinese products. core ISI said in a research
China had promised to note. "There is no reason for
retaliate in a move that either side — particularly
threatened a tit for tat the U.S. — to destroy the
trade war. process that both sides are
He said they expect to see building, which is what im-
a big increase — 35 per- posing tariffs would do."
cent to 45 percent this year Sen. Lindsey Graham, R-
alone — in U.S. farm sales to S.C., praised the adminis-
China. Mnuchin also fore- tration's efforts with China.
cast a doubling in sales of "It's smart to engage China
U.S. energy products to the on trade abuses, and it
Chinese market, increasing would also be smart to get
energy exports by $50 bil- them more involved in try-
lion to $60 billion in the next ing to help us with North Ko-
three years to five years. rea," Graham said.
Commerce Secretary Wil- Trump campaigned in 2016
bur Ross, who has been on a pledge to get tough
part of the U.S. negotiating on China and other U.S.
team, will go to China soon trading partners. He views
to follow up on last week's the U.S. trade deficit with
discussions, Mnuchin said. China as evidence that
In Saturday's statement, Beijing is engaged in abu-
Beijing committed to "sig- sive trading practices and
nificantly increase" its pur- has outmaneuvered previ-
chases of American goods ous U.S. administrations.
and services, saying the Last August, U.S. Trade Rep-
increase would "meet the resentative Robert Light-
growing consumption hizer began investigating
needs of the Chinese peo- Beijing's strong-arm tactics
ple and the need for high- to challenge U.S. techno-
quality economic develop- logical dominance. These
ment." include outright cybertheft
Last year, the U.S. had a of U.S. companies' trade se-
record $376 billion deficit crets and China's demands
with China in the trade of that American corpora-
goods; that was the largest tions hand over technology
by far with any nation. in exchange for access to