European stocks open lower ahead of major US-China trade talks – live business | The business


Reuters provided a useful explanation on trade negotiations. The two sides are trying to resolve deep differences over China's trade and intellectual property practices, industrial subsidies and market access – to prevent an increase in US tariffs on Chinese products scheduled for March 2.

What are Washington and Beijing discussing? After years of steady US trade deficits with Chinese and US claims that Beijing systematically obtained intellectual property and trade secrets through coercion and theft, the Trump government last year demanded fundamental changes in China's economic model to allow North American companies more level playing field. This includes the end of policies that Washington effectively states force US companies to transfer their technologies to Chinese partners and the full protection of US intellectual property rights.

What is at stake in these conversations? At the most basic level, a dominant position in future high-tech industries, according to the Office of the US Trade Representative. China is determined to modernize its industrial base in 10 strategic sectors by 2025, including aerospace, robotics, semiconductors, artificial intelligence and new energy vehicles. US officials say they have no problems with China going up the ladder of technology, but do not want this to happen with American know-how stolen or wrongfully obtained. They argue that China's huge support for state-owned enterprises is leading to overproduction, hampering the competitiveness of US companies.

How does Beijing see these complaints? Chinese officials often see US actions as a broad effort to prevent China's inevitable rise to a dominant position in the global economy. They deny that China requires or coercive technology transfers, saying such actions are commercial transactions between American and Chinese companies. At the same time, China is seeking to make an agreement with Trump to facilitate US tariffs on Chinese products and to directly reduce the trade imbalance between the two largest economies in the world by increasing purchases of US goods, including soy and energy. Beijing has also taken some steps to open up to more imports, including reducing tariffs on imported cars and allowing foreign companies in some sectors to hold most of their operations in China.

What actions were taken by the US? Donald Trump has imposed punitive tariffs of $ 250 billion on goods imported from China so far – a 25% tax on $ 50 billion on machinery, semiconductors and other technology-related products, and 10% tariffs on a wider range of products of US $ 200 billion. This includes many chemicals, building materials, furniture and some consumer electronics. So far, Trump has spared many consumer goods, including cell phones, computers, clothes, and fare shoes. But if no deals were reached on March 2, Trump threatened to impose new tariffs on goods worth $ 267 billion, effectively the rest of China's imports.

Has China retaliated? Yes. China has imposed 25% tariffs on the $ 50 billion in US goods, including soybeans, beef, pork, seafood, whiskey, ethanol and motor vehicles. Beijing has also imposed tariffs of 5% to 10% on another $ 60 billion in US goods, including liquefied natural gas, chemicals, frozen vegetables and food ingredients. So far, Beijing spared imports of US commercial aircraft manufactured largely by Boeing. Since Trump and Chinese President Xi Jinping agreed in December to continue the current round of talks, China has also suspended tariffs on US automobiles and resumed some US soy purchases.

Mike Starkey unloads soy from his harvester while harvesting his crops in Brownsburg, Indiana.

Mike Starkey unloads soy from his harvester while harvesting his crops in Brownsburg, Indiana. Photo: Michael Conroy / AP


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