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Trade war

US-China trade talks extend to April over differences on tariffs

Xi omits US stopover from Europe trip, eliminating March summit with Trump

A worker sweeps the road at a container port in Qingdao in east China's Shandong Province. American and Chinese trade negotiators cannot agree on enforcement measures ahead of a trade deal.   © AP

WASHINGTON/BEIJING -- A hoped-for summit to wrap up a U.S.-China trade deal has been postponed from this month to April or later as Beijing bristles at Washington's demands for a one-way enforcement framework.

China's Ministry of Foreign Affairs on Monday announced the schedule for President Xi Jinping's trip to Europe later this month. Not included in the itinerary was a stopover in the U.S. for talks with President Donald Trump, which Beijing had considered as an occasion to close the trade deal. The absence essentially eliminates any chance for the two leaders to meet before the end of March.

The delay reflects a continuing conflict over enforcement. Even as negotiations enter the final stages, Washington and Beijing still have differences over a framework that verifies China's adherence to the eventual deal and punishes the country for failing to follow it, a U.S.-China diplomatic source said. The rift has stretched out the timeline for talks, pushing the wrap-up summit to April or even as late as June.

"There's still a lot of work to do," U.S. Treasury Secretary Steven Mnuchin said Thursday, acknowledging that the summit would not happen by the end of March as previously discussed.

Mnuchin and U.S. Trade Representative Robert Lighthizer spoke by phone twice last week with Chinese Vice Premier Liu He to hammer out the text of a trade agreement. Chinese state-run news agency Xinhua reported Friday that the two sides made substantive progress.

Chinese President Xi Jinping, left, and U.S. President Donald Trump have not had a face-to-face meeting since they met in Buenos Aires in December.   © AP

Trump said Thursday that the talks are going "very well," but warned that "if it's not a deal that's a great deal for us, we're not going to make it."

Chinese Premier Li Keqiang told reporters on Friday that he wants a "win-win" result that benefits both sides.

Beijing and Washington have agreed to continue holding regular ministerial and vice ministerial meetings for enforcement, but the U.S. wants the right to impose punitive tariffs if it determines that China is not holding up its end of the deal.

American negotiators including Lighthizer reportedly have pressed China to promise not to respond with retaliatory duties in such cases, as Beijing did multiple times last year in response to U.S. tariffs on Chinese products.

Beijing has resisted a unilateral enforcement framework. Wang Shouwen, the Chinese vice minister of commerce, has said any such mechanism must be "fair and equal."

The U.S. side is also trying to decide when to eliminate existing tariffs. Trump has said the tariffs imposed during the trade war will be lifted once a deal is signed, but Lighthizer and other hawks favor a phased approach, removing duties gradually as China demonstrates its adherence to the agreement.

China wants the former. "We agreed at the summit last December to work toward mutually eliminating all additional tariffs," Wang said at a press conference earlier this month.

American media sources report that Xi seeks a full-fledged state visit to the U.S. in late April, rather than the brief stop previously envisioned. Both countries are eyeing a meeting during that time frame, a senior official at a U.S. business group says.

But Xi may be less than eager to make such a trip, given that last month's talks between Trump and North Korean leader Kim Jong Un in Vietnam broke down. Returning to the U.S., only for Trump to refuse to scrap the tariffs, would mean a complete loss of face for the Chinese leader.

The South China Morning Post reported Saturday that the summit could be postponed all the way to June. Such a meeting could take place on the sidelines of the Group of 20 summit in Japan.

In other respects, the negotiations have been productive. The U.S. and China have worked out specific language covering several American demands: bolstering intellectual property protections, barring forced technology transfers, lowering nontariff trade barriers, increasing agricultural imports, opening up service markets and keeping the yuan stable.

China's National People's Congress enacted a law Friday banning coerced technology transfers through "administrative measures." Lighthizer said the law, which takes effect in January, represents a significant step.

The two sides reportedly are also near an agreement in which China pledges to have its local governments follow World Trade Organization rules on corporate subsidies. Washington has complained that such aid lets Chinese businesses slash their prices, creating an uneven playing field.

"We want to end the trade war," a Chinese negotiator said, citing the country's recent economic slowdown. But some in China are unhappy with what they regard as excessive concessions to the U.S. Beijing hopes to avoid the appearance of simply yielding to Washington's demands.

Beijing has agreed to open its financial and agricultural markets but made its own demands in return, such as allowing Chinese companies to participate in U.S. insurance and other markets. It also seeks looser restrictions on exports to China of sensitive technologies such as artificial intelligence.

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