How the Government Shutdown Is Preventing a Potential US-China Trade Deal

Following this week’s midlevel discussions to resolve their trade concerns, the United States and China have agreed to move ahead with another round of negotiations at the end of January.

Treasury Secretary Steven Mnuchin announced that Chinese Vice Premier Liu He will “most likely” visit Washington on Jan. 30 and 31 to meet with his U.S. counterparts, including U.S. Trade Representative Robert Lighthizer, reports Reuters.

However, a deal could potentially be stalled by the ongoing partial shutdown of the U.S. government, which has entered its 21st day — tying a record for the longest gap in federal funding as President Donald Trump continues to feud with congressional Democrats over funding his proposed wall on the U.S.-Mexico border.

An extended shutdown could impact the logistics of scheduling diplomatic meetings between the countries, as the USTR confirmed it “would be an agency affected by a lapse in appropriations.” (Should it last through Saturday, the shutdown will become the longest in U.S. history.)

“Essential personnel will be on duty to ensure USTR continues to conduct all necessary operations, including trade negotiations and enforcement,” a spokesman for the department added.

The higher-level talks would come less than a month after delegates from the world’s two largest economies met in Beijing from Monday to Wednesday. Led by Deputy U.S. Trade Representative Jeffrey Gerrish and Chinese Vice Commerce Minister Wang Shouwen, the meeting broached China’s imports of U.S. goods and opening up its markets to the West, as well as better protection of American intellectual property.

The U.S. and China are working out a possible deal to end a bitter trade dispute that has already recorded tariffs on $250 billion worth of Chinese imports and levies on $110 billion of U.S. goods. A 90-day financial truce reached by Trump and Chinese President Xi Jinping during the G20 summit has put on hold the White House’s threat to raise levies from 10 percent to 25 percent on $200 billion of those goods.

If both countries fail to settle on a deal come March 1, the Trump administration said it would go ahead with the planned tariff increase.

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