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BUSINESS Wednesday 4 december 2019
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Forever war: U.S. and China struggle to defuse trade conflict

By PAUL WISEMAN include stealing sensitive
AP Economics Writer technology, unfairly subsi-
WASHINGTON (AP) — Busi- dizing their own firms and
nesses and investors have forcing foreign companies
been nervously monitoring to hand over trade secrets
U.S.-China trade talks for as the price of admission to
months, hoping the world's China's market.
two biggest economies On Oct. 11, Trump had an-
can de-escalate their trade nounced what he cast as a
war and restore some pre- breakthrough: Beijing had
dictability to global com- agreed to buy far more
merce. U.S. farm products — as
President Donald Trump much as $50 billion worth
delivered another setback annually, the administra-
to the optimists Tuesday, tion said — and to better
saying he was willing to protect intellectual prop-
wait until after the 2020 erty. In return, the United
elections to close a deal States suspended plans to
with Beijing. raise tariffs on $112 billion in
His comments came a day Chinese goods.
after Trump unexpectedly Even though this so-called
reversed his own policy Phase 1 deal left the thorni-
on a separate trade front est issues for future nego-
and pledged to tax steel tiations, the two sides still
from Brazil and Argentina. haven't managed to final-
On top of that, his admin- ize it.
istration proposed to target In this Oct. 10, 2019, file photo Chinese Vice Premier Liu He accompanied by U.S. Trade Repre- "It now looks likely that a
sentative Robert Lighthizer, left, and Treasury Secretary Steven Mnuchin, greets the media before
$2.4 billion in French imports a minister-level trade meetings at the Office of the United States Trade Representative in Wash- Phase 1 deal will be rather
in a retaliatory move over ington. limited in scope, hardly re-
France's new digital tax. Associated Press solving the broader trade-
The Trump administration related uncertainty that
says France's tax unfairly tariffs would hit many Chi- ing improved guidelines the form of price increases. continues to cloud business
targets American tech gi- nese-made goods that are for protection of patents, Negotiators have met 13 sentiment in both coun-
ants like Google, Amazon on holiday shopping lists copyrights and other intel- times. Truces have come tries," said Eswar Prasad, a
and Facebook. — smartphones and toys, lectual property and lifting and gone. Predictions of Cornell University econo-
Trump's mercurial state- for example — and would a five-year ban on Ameri- peace have proved pre- mist who formerly led the
ments and actions on extend Trump's tariffs to just can poultry. mature. China division at the Inter-
trade have rattled inves- about everything China Then Trump's comments For now, at least, the reality national Monetary Fund.
tors this week. In late morn- ships to the United States. Tuesday seemed to sug- remains: The United States Beijing has been reluctant
ing trading Tuesday, the A former Trump administra- gest that a breakthrough is taxing more than $360 to make the kind of sub-
Dow Jones Industrial Aver- tion official who has been might not come anytime billion worth of Chinese im- stantive policy reforms that
age was down about 400 briefed on the talks and soon. ports, and Beijing is retaliat- would satisfy the Trump ad-
points. requested anonymity to It's been a year and a half ing with tariffs on $120 bil- ministration.
Dan Digre has long since speak frankly said the U.S. since Trump declared that lion of American products. Doing so would likely re-
stopped expecting much is considering delaying the "trade wars are good, and Not since the 1930s has the quire scaling back China's
from U.S. negotiations with Dec. 15 tariffs if the talks easy to win.'' But his war world seen such intense aspirations for techno-
China. He's heard it all be- go well — but keeping the with China has dragged trade warfare. logical supremacy, which
fore. option to restore the tariffs on and on, with each side The two sides are fighting it sees as crucial to its
Digre's 70-year-old family if no progress is made to- imposing — and raising — over allegations that Chi- prosperity.q
firm, Misco Speakers in St. ward a more comprehen- import taxes on hundreds na has deployed preda-
Paul, Minnesota, is caught sive agreement. of billions of dollars of each tory tactics in its drive to
in the crossfire of the U.S.- The signs have been mixed. other's goods. achieve global dominance
China conflict. Misco is ab- Last week, Trump said Those taxes are paid by in such advanced tech-
sorbing Trump's tariffs on "We're in the final throes of companies that import nologies as quantum com-
the parts it buys from China a very important deal." And those goods. These im- puting and electric cars.
for the specialized speak- China's Commerce Minis- porters must either absorb The administration asserts,
ers it makes for the aircraft try reported that its nego- those higher costs or pass and many China analysts
and medical device indus- tiator, Vice Premier Liu He, them on to customers in agree, that these tactics
tries, among others. had spoken by phone with
"I'm hopeful that something his U.S. counterparts, U.S.
will happen, but I'm not op- Trade Representative Rob-
timistic,'' Digre said. "There ert Lighthizer and Treasury
have been so many false Secretary Steven Mnuchin.
deals: A deal is close, a The official Xinhua News
deal is close — then noth- Agency said the men had
ing.'' discussed their "core con-
Both sides may have an cerns'' and "agreed to
incentive to reach a deal maintain communication
before Dec. 15. That's on remaining issues in con-
when the Trump adminis- sultations on the Phase 1
tration is set to start taxing deal."
an additional $160 billion Earlier, China had made
of Chinese imports. These goodwill gestures, issu-