A U.S. delegation to China, led by Treasury Secretary Steve Mnuchin has demanded China take steps to narrow the trade deficit with America to $200 billion by 2020. Also targeted by the team were China’s state subsidies for strategic industries. Gabriel Wildau reports:
The target represents a doubling of a previous White House demand that China cut the bilateral deficit by $100bn.
The negotiators also asked that Beijing cut import tariffs to levels at or below those imposed by the US on the same goods from China.
The proposal further calls on Beijing to eliminate all subsidies linked to its “Made in China 2025” industrial policy. The plan is designed to promote Chinese leadership in advanced industries including robotics, aerospace and electric vehicles.
The document also requested that Beijing remove investment restrictions affecting foreign companies operating in China, including caps on foreign equity ownership of locally incorporated groups.
Washington insists that intellectual property theft, forced technology transfers and joint venture requirements affecting foreign investment amount to a systematic effort to erode US leadership in strategic sectors.
The revelations dispel concerns that internal divisions among President Donald Trump’s advisers have prevented the formulation of a coherent set of demands.
Read more here.
Mnuchin on trade with China: Cautiously optimistic about meetings
Jeremy Jones, CFA
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