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Economy

US-China economic dialogue ends in a tiff

Press conferences canceled; no joint statement issued

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Chinese Vice Premier Wang Yang, left, and U.S. Treasury Secretary Steven Mnuchin attend the U.S.-China Comprehensive Economic Dialogue in Washington on July 19.   © Reuters

WASHINGTON -- Negotiators involved in the first U.S.-China Comprehensive Economic Dialogue here on Wednesday failed to produce concrete results.

The U.S. later issued a statement saying China acknowledged a shared objective to reduce the U.S.'s bilateral trade deficit. But the statement made no mention of specific reduction targets in steel and other sectors, indicating that the two sides could not iron out key differences.

The one-day meeting was attended by Treasury Secretary Steven Mnuchin and Commerce Secretary Wilbur Ross of the U.S. as well as Vice Premier Wang Yang and Finance Minister Xiao Jie of China.

The dialogue was held under a "100-day plan" that presidents Donald Trump and Xi Jinping agreed upon in April at a meeting held to discuss the trade imbalance. With the plan reaching the 100th day on July 16, the two governments planned to discuss specific measures to narrow the U.S. deficit, such as further opening the Chinese market.

In May, the governments announced the first set of measures, including China agreeing to resume U.S. beef imports.

But Wednesday's dialogue ended with the sudden cancellation of press conferences and no joint statement. Then the U.S. released its own memo that, in part, called for the talks to continue but said nothing new regarding wider U.S. access to the Chinese market.

Chinese state-owned Xinhua News Agency, meanwhile, reported that the two countries agreed to constructively cooperate on reducing America's trade deficit. The report went on to say that the sides also agreed to cooperate in the service sector. No details were mentioned.

In addition, Xinhua said the two parties discussed a "one-year plan" that is to follow the 100-day plan. The U.S. did not refer to this in its statement.

According to U.S. and Chinese diplomatic sources, main focal points on Wednesday were China's excessive steel production, restrictions on foreign insurers entering China and a Chinese regulation mandating that foreign internet companies keep servers in the country.

Steel exports from China to the U.S. have decreased sharply due to anti-dumping duties imposed by Washington. But the U.S. worries about imports from China making their way through third countries like South Korea and Vietnam.

American negotiators on Wednesday might have demanded that China provide specific data on the issue. But the two sides are said to have failed to agree on concrete measures to correct excessive steel production and prevent Chinese steelmakers from releasing cut-rate materials on the market.

Trump, who met American steelmakers the same day, replied to a reporter's question by saying the U.S. may impose high tariffs on steel imports.

The Trump administration could use a national security argument to slap high tariffs on or apply quotas to steel imports not only from China but also from Japan, Europe and other exporters.

Following his meeting with Xi in April, Trump said he had "great chemistry" with the Chinese leader and shifted toward conciliation with China. The posture reflected Trump's placing of greater weight on U.S.-China cooperation in dealing with North Korea's nuclear and missile development programs.

But North Korea has not ceased its missile tests, and at the end of June the U.S. slapped economic sanctions on China's Bank of Dandong, accusing it of aiding North Korea through money-laundering activities. Beijing fiercely protested.

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