U.S. and China have begun negotiations on the trade dispute that has been going on since last year. According to a report from Reuters, officials are holding high-level talks in Washington on Thursday and Friday to create an outline of the deal to settle the dispute.
Six memorandums of understanding [MOU] will be drafted by the negotiators on structural issues including forced technology transfer and cyber theft, intellectual property rights, services, currency, agriculture and non-tariff barriers to trade. In a meeting held last week at Beijing, officials of both sides outlined obligations on paper.
Light at the end of the tunnel
The process has become a real trade negotiation, stated the report citing sources. The MOUs include the most complex issues that have affected the trading ties of both countries. These issues are considered as the primary reasons that piqued Donald Trump to charge undue import duties on Chinese goods.
The sources cited in the report that the talks could still end in failure. However, efforts to draft an MOU is a stepping stone to end the trade war and also getting Chiba to sign off on principles that will resolve significant trade issues between the countries.
The officials also discussed an “enforcement mechanism” for the deal, the source cited in the report. They were also considering a 10-item list of ways that China could lower its trade surplus with the U.S. This could be done by buying agricultural produce, energy and goods such as semiconductors.
Donald Trump and Xi Jinping signed a 90-day truce last December to pause the trade war and proposed plan to resolve the trade dispute. Both countries are pushing for an agreement by March 1 which would mark the end of the 90-day truce. Trump has said that if the countries don’t reach a deal by March 2 he will increase the tariffs from 10% to 25% on 200 billion worth of Chinese imports.
“I think they’re trying to move fast so that doesn’t happen,” he told reporters in the Oval Office. Extension of the deadline is also possible. China has also made a tit for tat decision if the trade negotiations can’t resolve the issue.
However, after the meeting in Beijing last week Trump tweeted “Talks with China are going very well!”
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