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China promises to buy more US goods during in-progress trade talks

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The country promised to “substantially” expand purchases of US goods after the latest round of trade talks, and both sides planned further discussions to reach a breakthrough with only a month to go before the administration increases tariffs

President Donald Trump stated that he will dispatch two of his top negotiatiors to China following two days of talk with Chinese officials in Washington. Treasury Secretary Steven Mnuchin and US Trade Representative Robert Lighthizer will visit the Asian nation in mid-February to hold the next round of talks.

On Friday, the two sides made important progress during talks that were candid and specific. China agreed to increase imports of US agriculture, energy, industrial products and services, without providing any details. The countries also agreed to strengthen cooperation on IP rights and technology transfer, according to Xinhua.

The White House didn’t list any new commitments by either side, saying only that while there was progress made, “much work also remained to be done.” The White House reiterated its threat to raise tariffs by March 1, unless a “satisfactory outcome” is reached.

Trump also raised the possibility of a face-to-face meeting with Xi Jinping after receiving an official invitation from the Chinese leader. Earlier, he tweeted that “no final deal will be made until my friend President Xi, and I, meet in the near future.”

One possibility would be for a meeting with Xi after the US president’s planned summit with North Korean leader Kim Jong Un in late February. The teams have made “tremendous progress” but that “doesn’t mean we have a deal,” Trump told reporters in the Oval Office after meeting with Chinese Vice Premier Liu He. China has agreed to buy a substantial amount of American soybeans, the president added, calling the offer a sign of good faith.

The agreement to continue the talks has now raised hopes that the two biggest economies in the world could a way to end the conflict before March 1, when the US stated that it may more than double tariffs on $200bn of Chinese goods.

However, 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.

Lighthizer told reporters on Thursday that the two sides had engaged in an intense and detailed discussion focused largely on US demands for Chinese structural reforms this week. He conceded, however, that the two sides were only just starting to draft a common negotiating document, a sign of just how much work remained on nailing down the substance.

He stated that the US and China were still working on just what exactly the form of a final deal would take, but it would not be going to Congress for a vote. One possibility would be for the two sides to issue a memorandum of understanding, raising questions over how enduring such a deal would be and whether it would last into another administration. In the past, China has walked away from similar MOUs after a time period.

The US is insisting that any deal should be enforceable and Lighthizer called that idea “foundational” on Thursday. But people familiar with the discussions say the US side itself has yet to agree internally on what the right mechanism to enforce any agreement would be.

While the Chinese have signaled their willingness to have a deal be enforceable, they have been toying with ideas such as having independent arbitration tribunals that the US is unlikely to accept, one person familiar with the negotiations stated. Some in the US business community remain wary of a quick deal which they fear could leave some of the knottier issues in the economic relationship unresolved.

Myron Brilliant, executive vice president and head of international affairs at the US Chamber of Commerce, stated that while progress had been made this week the reality was that a lot of hard work remained. “We’re at halftime of the Super Bowl of trade relations,” Brilliant told reporters on a conference call.

The slow pace of talks and mountain of issues remaining to be agreed sets up what could be a tense countdown to the March 1 deadline, with a personal meeting between Trump and Xi looming as perhaps the only way to bridge some gaps.

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