Markets

Trump's tariff deadline set to be delayed

Trump's tariff deadline set to be delayed

US and Chinese negotiators opened two days of high-level talks in Washington on Wednesday aimed at settling a trade war that has weakened both economies, shaken financial markets and clouded the outlook for global trade. The sides planned to engage in 90 days of negotiations with a view to achieving needed structural changes in China that affect trade between the two countries.

Trump, meanwhile, has seen his public approval ratings battered by the partial government shutdown and is said to worry about the tariff war's impact upon USA financial markets.

He remained upbeat on prospects for reaching an agreement, saying in a series of morning tweets that the talks were "going well".

"I think when President Xi and I meet, every point will be agreed to", Trump added.

Trump and Liu - China's vice premier and Xi's top economic advisor - are expected to meet while the Chinese delegation is in Washington. China has offered to accelerate orders for products such as American soybeans and liquefied natural gas but is resisting demands to overhaul its industrial policies.

The United States and China launch a critical round of trade talks on Wednesday amid deep differences over U.S. demands for structural economic reforms from Beijing that will make it hard to reach a deal before a March 2 USA tariff hike.

But there was little concrete evidence they bridged yawning differences over the toughest issues such as China's policy on intellectual property and the heavy involvement of the state in its economy.

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The United States and China have been involved in months of tariff tit-for-tat that has slowed the Chinese economy and has had a serious economic impact on USA manufacturing and agriculture.

"Unfortunately, as was true for China's previous notifications, China's most recent notification suffers from both severe under-reporting of important programs and significant over-reporting of irrelevant or minor programs".

While China has offered increased purchases of USA farm, energy and other goods to try to resolve the trade disputes, negotiators dug into thornier issues. That's because the build-up for the meeting-and the expectations of a deal-will be so high that a negative outcome would tank markets globally and batter both economies. China has in the past walked away from similar MOUs after a period of time. But people familiar with the discussions say the USA side itself has yet to agree internally on what the right mechanism to enforce any agreement would be.

Topics covered by the US questions include subsidies for China's fishing industry and the activity of so-called government guidance funds, which seek to foster domestic innovation in different industries from advanced engineering and robotics to biotechnology and clean energy.

"We have made tremendous progress", he said.

Elsewhere on Wednesday, Federal Reserve Chairman Jerome Powell told reporters that drawn-out trade talks with China could hurt the USA economy by sapping business confidence.

"They started on a smaller scale", he said, describing the new pledge as "tremendous".