As US-China Trade Talks Resume, Why Trump Could Have New Leverage

U.S. officials are in Beijing this week to continue trade negotiations with the Chinese government as the March 1 deadline for the countries’ 90-day tariff truce draws closer.

While tensions remain high between the global leaders, mounting concerns about an economic slowdown in China may give President Donald Trump’s administration additional leverage, even as earlier tactics (namely, imposing tariffs on $250 billion worth of Chinese goods) were met squarely with retaliation on the part of Chinese president Xi Jinping.

Speaking to reporters on Monday, Lu Kang, spokesman for China’s Foreign Ministry, expressed hope that the two countries could reach an agreement: “From the beginning we have believed that China-U.S. trade friction is not a positive situation for either country or the world economy. China has the good faith, on the basis of mutual respect and equality, to resolve the bilateral trade frictions.”

Trump is likely feeling the urgency of resolving the trade war, too, as signs of uncertainty have wreaked havoc on Wall Street and the global markets in recent months. While he’s shifted blame to the Federal Reserve and called the December sell-off — the worst for the S&P 500 since the Great Depression — a “little glitch,” he’s no doubt feeling pressure from business leaders to calm the waters with America’s biggest trading partner.

Given the tight time frame and the complexity of trade policy, few experts expect the countries to reach a comprehensive deal before the March deadline, but on Monday, U.S. Secretary of Commerce Wilbur Ross told CNBC that the negotiations could lead to some kind of agreement.

“I think there’s a very good chance that we will get a reasonable settlement that China can live with, that we can live with and that addresses all of the key issues. And to me those are immediate trade. That’s probably the easiest one to solve,” he said.

If the leaders fail to make a deal, Trump has threatened to raise the tariff rate on $200 billion in Chinese goods to 25 percent from 10 percent, and China has vowed to retaliate.

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