China and U.S. to Continue Trade Talks Next Week

In some cases, the purchase offers are being poorly received in the United States because they could distort existing supply chains. This week, China offered to ramp up purchases of American semiconductors, to the industry’s chagrin.

“The reported offer by China to vastly increase its purchases of U.S. semiconductors may look good at first glance, but it’s a mirage, aimed at shuffling U.S. supply chains and driving them deeper into China,” said John Nueffer, president of the Semiconductor Industry Association. “It would also represent a significant departure from the market-driven economics that have long defined our sector and the U.S. economy.”

He added: “We are confident U.S. government negotiators will see through this distraction.”

The Trump administration and the American business community have mostly been leery about an agreement that centers on purchases of goods but does not address long-term issues involving China’s government-backed drive for high-tech competitiveness. Some market-oriented economists in China have also advocated limits on the government’s industrial policies, because they worry about the ever-rising debt associated with them.

“If we don’t address the deeper issues, neither side will be doing itself any favors,” said Tim Stratford, who is the chairman of the American Chamber of Commerce in China and the managing partner of the Beijing office of the Covington and Burling law firm.

Mr. Trump and Mr. Xi agreed in Buenos Aires on Dec. 1 on a stopgap compromise that does not fully satisfy either side but might prove durable. Mr. Trump agreed not to raise tariffs further then but kept in place the tariffs he had already imposed, while China removed most of the retaliation that it had imposed.

That deal has not satisfied trade hawks in the United States, who want broader changes in the bilateral relationship, or the more nationalistic wing of the Chinese Communist Party, which perceived the deal as representing, to some extent, a Chinese retreat.

Article source: https://www.nytimes.com/2019/02/15/business/trump-china-us-trade.html?partner=rss&emc=rss