December 3, 2018 / 9:33 PM / 6 months ago

Breakingviews - U.S.-China talks depend on speaking same language

Chinese and U.S. flags are set up for a signing ceremony during a visit by U.S. Secretary of Transportation Elaine Chao at China's Ministry of Transport in Beijing, China April 27, 2018. REUTERS/Jason Lee

WASHINGTON (Reuters Breakingviews) - The United States and China are already speaking different languages about trade. Their respective tariff-ceasefire spin over the weekend reflects different interpretations and priorities. Whether on auto import duties or the welcome Chinese students receive in America, negotiators in the trade talks that will now take place may struggle to restore the norms that prevailed before hostilities began, let alone go further.

Trump has created leverage over China that past U.S. presidents didn’t enjoy. After imposing duties on about half of Chinese imports, he and Chinese counterpart Xi Jinping agreed to halt their escalating trade war during their weekend dinner at the G20 gathering in Argentina. China agreed to buy more U.S. goods and to discuss structural changes to enhance intellectual-property protection and reduce forced technology transfers, according to the White House.

But differences emerged as soon as the dinner was cleared away. Beijing said America was eager to host students from the People’s Republic and that both sides agreed to increase market access – implying that included the United States, which has cracked down on Chinese investment. The White House didn’t mention either issue, but said China was open to reconsidering Qualcomm’s $44 billion deal to acquire NXP Semiconductors, which Beijing had failed to approve leading to its abandonment in July – although that seemed moot on Monday with Qualcomm saying it considered the issue closed.

Meantime, Trump tweeted on Monday that China had agreed to “reduce and remove tariffs” on U.S. autos, an issue neither side mentioned in their summaries of the dinner. Earlier this year, China lowered overall auto levies from 25 percent to 15 percent, but later increased duties on American-made vehicles to 40 percent in response to the U.S. government adding a 25 percent tariff on Chinese autos. Beijing hasn’t confirmed if Trump’s tweet means levies will go down to 25 percent, 15 percent, or zero – or if it’s even accurate.

The People’s Republic was also vague on the thorniest issues in U.S. trade relations, declining to refer specifically to technology or IP. White House adviser Peter Navarro told National Public Radio on Monday that “talk is cheap” and Trump wouldn’t accept anything less than verifiable structural changes. With the starting points garbled, the two sides could easily end up back where they were before their G20 appetizers arrived.


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