Ross on CNBC: U.S., China could settle immediate trade issues

Roman Schwartz
January 8, 2019

Talks in Switzerland would follow a meeting due to start in Beijing on Monday between US and Chinese officials, the first formal gathering between the two sides since Trump and Chinese President Xi Jinping agreed to a 90-day tariff truce in December, following a widely-anticipated dinner at the Group of 20 meeting in Buenos Aires.

Officials from both countries are meeting in China this week in the first face-to-face interaction they've had since last November, when they agreed to a 90-day cease-fire in their trade dispute.

Economic data show the Chinese economy has suffered since Trump past year slapped stinging tariffs on more than US$250 billion in Chinese imports.

China on Monday voiced firm opposition to a US warship trespassing into China's territorial waters off the Xisha Islands, and urged the USA side to immediately stop such kind of provocative actions.

A USA guided-missile destroyer on Monday sailed within 12 nautical miles of disputed islands in the South China Sea "to challenge excessive maritime claims", a Pacific Fleet spokeswoman told Reuters.

Asked about the timing of the operation during trade talks, Lu said resolving issues would benefit the two countries and the world.

Data last week showed manufacturing has slowed in both China and the United States, though the U.S. Labour Department on Friday reported a surge in new jobs in December along with higher wages.

During trade talks this week, the two sides face potentially lengthy wrangling over technology and the future of their economic relationship.

"The main thing is the administration's implied progress on talks with China - that's something that market sees as very important", said Rick Meckler, partner at Cherry Lane Investments. I think we will make a deal with China.

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"The Chinese side immediately sent military vessels and aircraft to conduct verification and identification on the US ship and warned it to leave", Lu told the briefing.

"From the beginning, we have believed that China-US trade friction is not a positive situation for either country or the world economy".

Wang is expected to lead China's team to the annual forum in Davos, Switzerland.

The American side in the trade talks is being led by a deputy US trade representative, Jeffrey D. Gerrish, according to the USA government.

He added that it would be easiest to tackle immediate trade, but harder to resolve enforcement issues and structural reforms such as intellectual property rights and market access. Beijing responded by imposing penalties on $110 billion of American goods, slowing down customs clearance for USA companies, and suspending issuance of licenses in finance and other industries.

"It certainly has hurt the Chinese economy", Ross told CNBC.

The ratcheting dispute has pummelled confidence in China, sending the stock markets tumbling while the yuan has fallen against the dollar.

For their part, Chinese officials are unhappy with USA curbs on exports of "dual use" technology with possible military applications. "We have lodged stern representations with the USA side".

In addition to the bruising trade war, China is also grappling with a slowing domestic economy, with growth slowing to 6.5 percent in the third quarter, as a battle against debt has ramped up. Trump said on Friday he wasn't concerned about Apple's revenue warning.

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