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US, China tariff trade war: bad signals before Trump, Xi Jinping meet

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trump xi china
President
Trump takes part in a welcoming ceremony with China’s President
Xi Jinping in Beijing.

REUTERS/Thomas
Peter


  • President Donald Trump is talking up the possibility of
    progress towards ending the trade war with China.
  • But other parts of the administration are still going after
    China.
  • Vice President Mike Pence took shots at China during a speech
    at the Asia-Pacific Economic Cooperation summit over the
    weekend.
  • The Department of Commerce is also moving ahead with a
    rule that could limit the export of certain technologies to
    China.
  • Trump and Chinese President Xi Jinping are scheduled to
    meet at the G20 summit at the end of November.

President Donald Trump may be
talking up the prospects of a dea
l to ease trade
tensions with China
, but much of his administration is still
acting like
any agreement is a long way off
.

Trump has discussed the possibility of a deal during his meeting
with Chinese President Xi Jinping at the G20 summit later this
month, and communications between Chinese and American officials
seem to point to a possible détente.

But recent posture from Vice President Mike Pence and others in
the administration have cast doubt that the drive for
reconciliation will produce results.

Pence takes a hard line in Asia

The most public repudiation of China from the administration came
during Pence’s speech at the close of the Asia-Pacific
Economic Cooperation (APEC) summit in Papua New Guinea.

The vice president seemed to implicitly take shots at the
Chinese economic model, reflecting continued differences between
the two countries.

We don’t drown our partners in a sea of debt. We don’t
coerce or compromise your independence. The United States deals
openly, fairly. We do not offer a constricting belt or a one-way
road,” Pence said in an apparent reference to China’s Bet and
Road initiative.

Pence also met with Xi during the APEC summit
and told reporters afterward that China
must agree to reforms
for the US to agree to any deal lowering tariffs.

“We’ve put tariffs on $250 billion in Chinese goods and we
could more than double that number, but we hope for better,”
Pence said. “The United States though will not change course
until China changes its ways

The Trump administration originally announced
tariffs
on Chinese products in March in response to China’s
alleged theft of US intellectual property and uncompetitive
practices for US companies operating in China. This lead to a
furious, but ultimately fruitless, round of negotiations before
the first set of tariffs were imposed in July.

In total, the US has applied tariffs to $250 billion worth
of Chinese goods coming into the US, while the Chinese have hit
$110 billion worth of US goods with duties.

The divisions between the US and China were again on
display when the 21 APEC member countries were
unable to agree on an official communique
from the meeting.
While the statement is largely ceremonial, it highlights the
acrimonious relationship between the two largest APEC
economies. 

According to reports, China wanted to include language in
the official remarks that rejected protectionism and
unilateralism — echoing Beijing’s accusations about the US. On
the other hand, the US wanted to include language that critiqued
China’s trade practices.

Back home, the Trump administration’s fight with China is
also taking another step foward

On Monday, the Department of Commerce began taking public
comment on new rules that would give the administration the
ability to restrict exports of certain critical technologies on
the basis of national security — which could allow the US to stop
exports of some technology to China.

Under the recently-passed Export Control Reform Act, the
Trump administration can limit the export of “emerging and
foundational technologies” to adversarial countries.

Under previous administrations, export controls were
typically limited to technology with direct military
capabilities. More general rules restricting exports that could
theoretically have military applications would be a significant
broadening of those restrictions.

Given this new power, the Trump administration wants to
prevent exports related to 14 high-tech sectors, such as
biotechnology, robotics, and artificial intelligence.

The new rule is also part of a broader campaign by various
parts of the Trump administration to use non-tariff measures to
put pressure on Chinese economic interests. For instance, the
Department of Justice has
increased the number of Chinese firms
being charge with
economic espionage and created
a task force
to combat illegal Chinese economic
practices.

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