Asian Markets Cautious on US-China Talks

US, China trade talks to resume amid low expectations

US, China trade talks to resume amid low expectations

Global stocks were mostly higher Monday as investors welcomed signs of progress in resolving the trade dispute between the US and China.

US-China Business Council President Craig Allen, speaking to reporters in Beijing on Monday, said more tariffs could create "grave economic distortions", but that Trump had been very clear about the problems in the trade relationship.

While Beijing is unlikely to blink during Wednesday's talks, the United States administration remains split between China hawks and treasury officials.

Chinese authorities have said they will take "comprehensive measures", which companies worry could mean targeting operations of American businesses in China for disruption.

USA and Chinese officials are set to hold two days of talks in Washington starting Wednesday in an effort to find a way out of the escalating trade confrontation. The official declined further comment but pointed out Trump's own pessimistic comments in the Reuters interview.

President TrumpDonald John TrumpConsultant secures Democratic nomination in Wyoming House race Wyoming treasurer wins GOP gubernatorial nod, beating Trump-backed rival Trump to announce NAFTA "handshake" deal on Thursday: report MORE has threatened to smack tariffs on nearly all of the $500 billion of Chinese annual exports to the U.S.

That figure would be far more than China imports from the United States, raising concerns that Beijing could consider other forms of retaliation, such as making life more hard for American companies in China or allowing its yuan currency to weaken further to support its exporters. China hardliners, such as White House adviser Peter Navarro, remain opposed to the American companies' dependence on China.

The company said higher prices may prompt more parents to buy auto seats, swings and portable play yards on the secondhand market.

They have assumed a direct impact on China's economic growth in 2018 of 0.1 to 0.3 percentage points, and somewhat less for the United States, but the impact will be bigger next year, along with collateral damage for other countries and companies tied into China's global supply chains. But it is unclear whether the talks will have any effect on the implementation of US tariffs and retaliation by China.

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"The vice minister from Mofcom is not going to be authorized to make some great offer, but if the Chinese say one interesting thing, maybe you set up a second meeting and the level goes up a step", said Derek Scissors, a China scholar at the American Enterprise Institute, a Washington think tank.

Trump told Reuters on Monday that he did not "anticipate much".

Unlike previous rounds of USA tariffs, which mainly targeted Chinese parts, including steel and electronic components, the latest proposals would affect many consumer products directly.

Beijing has denied USA allegations that it systematically forces the unfair transfer of US technology and has said that it adheres to World Trade Organization rules.

"We hope that both sides can quietly and steadfastly sit down together and commit to talks on the basis of equality and trust to bring a good result", Mr. Lu said.

The ministry also said it will lodge a complaint with the World Trade Organization against the United States tariffs on Chinese goods under Section 301 investigation.

Rod Hunter, who served on President George W. Bush's economic team and is now at law firm Baker McKenzie, said while other U.S. Treasury secretaries had successfully led talks with China, Mnuchin wields less internal power than many of his predecessors and, importantly, has little control over the cudgel of tariffs.

The administration already was forced to announce a $12 billion aid program for farmers hurt by the trade wars, as USA agricultural products, like soybeans, were an easy target for China and others.

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