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Little Progress in U.S.-Mainland China Talks as Trade Restrictions Increase

No agreements were announced following two days of talks in Washington during the week of 20 August on resolving trade irritants between the United States and mainland China. Press sources indicate that the United States focused more on the structural changes it wants mainland China to make to its economy, moving away from merely pressing Beijing to increase imports of U.S. goods.

A Trump administration spokesperson said the two sides “exchanged views on how to achieve fairness, balance, and reciprocity in the economic relationship, including by addressing structural issues in China such as those identified in the Section 301 report.” A New York Times article quoted U.S. Commerce Secretary Wilbur Ross as calling the talks “relatively low-level, relatively exploratory sessions” that “are not destined as of today for a big breakthrough.” A statement from the mainland Chinese government said the talks were “constructive and frank.” No further discussions have yet been scheduled, although trade could be on the agenda if, as expected, President Trump meets President Xi in November.

The discussions coincided with the Trump administration’s imposition on 23 August of an additional 25 percent tariff on another US$16 billion worth of imports from the mainland and a six-day hearing on the possibility of higher duties on an additional US$200 billion in mainland Chinese goods. Public comments on that topic are due by 6 September.

The talks also followed closely President Trump’s signing into law of the Foreign Investment Risk Review Modernization Act, which would expand the jurisdiction of the Committee on Foreign Investment in the United States and is widely seen as primarily targeted at mainland China. Among other things, the new law (i) updates the CFIUS definition of “critical technologies” to include emerging technologies that could be essential for maintaining the U.S. technological advantage over countries that pose threats, (ii) adds new national security factors to the review process, and (iii) strengthens the government’s ability to protect critical infrastructure from foreign government disruption.

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