US and China ‘still very far apart’ on trade, says US ambassador

Washington wants timetable for meeting demands on trade and investment

US ambassador Terry Branstad: ‘We’d like to see China being just as open as the United States’ ©AP

Gabriel Wildau in Shanghai, Shawn Donnan in Washington and Edward White in Taipei

The US and China are “still very far apart” on disputes over trade, technology and market access, the US ambassador to China said on Tuesday, managing expectations ahead of a visit to Washington by a senior Chinese official.

Speaking at a conference in Tokyo, Terry Branstad said his country wanted to see a “specific timetable” on market opening, following demands presented by a US delegation that visited Beijing earlier this month. Mr Branstad was one of seven US representatives who participated in the trade talks.

“The Chinese have said ‘we want to see the specifics’. We gave them all the specifics in terms of trade issues. So they can’t say they don’t know what we’re asking for,” he said, according to Reuters. “We’re still very far apart.”

Mr Branstad said China had not met pledges to open financial services and cut auto tariffs. “There are many areas where China has promised to do but haven’t. We want to see a timetable. We want to see these things happen sooner or later,” he said.

President Donald Trump reiterated on Tuesday that he was eager for a deal with Beijing.

“Trade negotiations are continuing with China. They have been making hundreds of billions of dollars a year from the U.S., for many years. Stay tuned!” He tweeted.

The US has threatened tariffs affecting up to $150bn on Chinese exports, and China has said it would retaliate with comparable duties of its own. Mr Trump has asked Beijing to reduce the US’s $337bn bilateral trade deficit with China by $200bn in the next two years.

According to people briefed on the negotiations, the two sides will discuss a possible “mini deal” this week in which the US would reduce sanctions on ZTE Corp, the Chinese telecommunications company on whose behalf Mr Trump staged an unusual intervention on Sunday, and China would withdraw threatened retaliation against American agricultural exports.

But news of that deal is facing opposition from the US business community and both Republicans and Democrats in Washington concerned that Mr Trump may be forgoing an opportunity to force more meaningful economic reforms in China.

“About to get out negotiated by China again,” Republican senator Marco Rubio said in a series of tweets on Tuesday. “China intends to dominate the key industries of the 21st Century not through out innovating us, but by stealing our intellectual property & exploiting our open economy while keeping their own closed. Why are we helping them achieve this by making a terrible deal on ZTE?”

Mr Branstad said Mr Trump would like to see a “dramatic increase” in food exports to China. “We’d like to see China being just as open as the United States,” he said.

Liu He, China’s vice-premier and top economic adviser to President Xi Jinping, will travel to Washington on Tuesday for at least three days of talks.

Discussions in Beijing earlier this month yielded no deal, but the two sides agreed to keep talking and have held off on actually imposing most new tariffs. In addition to the call for deficit reduction, the US also wants China to end subsidies for strategic industries and strengthen intellectual property protection.

US businesses have privately expressed fears that Mr Trump was prepared to strike a quick deal on cutting the bilateral deficit that did not address these broader issues. Mr Trump’s promise to ease sanctions on ZTE as part of a wider trade accord has fuelled those concerns.

“[Our members] don’t want tariffs,” Tom Donohue, head of the US Chamber of Commerce, said at a press briefing in Beijing. “On the other hand they desperately want to get systemic problems [in China] resolved.”

China’s securities regulator last month issued new rules permitting foreign investors to take majority stakes in local securities companies.

No foreign bank has yet achieved majority control, but the regulator last week accepted JPMorgan Chase’s application to establish a new, majority-owned venture.

On autos, China’s state planner has issued a timeline for letting foreign automakers take majority control of their local manufacturing units, but it has not yet followed through on a separate pledge to lift tariffs on imported vehicles.

Additional reporting by Tom Mitchell in Beijing