•      Wed Apr 24 2024

Hopes are dim as US and China resume high-stakes trade talks

FILE – In this May 10, 2019, file photo, China’s Vice Premier Liu He, left is greeted by U.S. Treasury Secretary Steve Mnuchin, second from right, and U.S. Trade Representative Robert Lighthizer, third right, as he arrives at the Office of the United States Trade Representative in Washington. China’s Ministry of Commerce said Tuesday that Liu is going to Washington on Thursday for talks aimed at ending the tariff war. (AP Photo/Andrew Harnik, File)

WASHINGTON, Oct 9 (AP) — President Donald Trump and China’s Xi Jinping have plenty of reasons to call off their trade war.

Both face weakening economies that would likely further deteriorate if their conflict escalates.

Both are up against a formidable adversary that shows no inclination to yield.

Both are tangled in political turmoil — Trump with impeachment proceedings, Xi with angry protests in Hong Kong.

Both, in short, would welcome some good news.

Yet the 13th round of U.S.-China trade negotiations, set to begin Thursday in Washington, is unlikely to prove any more successful than the previous 12 in resolving tensions that have rattled markets, threatened global growth and paralyzed business investment in the United States.

The issues that divide the world’s two biggest economies — mainly over allegations that Beijing deploys illicit tactics in a drive to acquire and develop cutting-edge technology — are likely too daunting to produce the kind of “big deal” that Trump says he wants.

At least anytime soon.

The already slim prospects for success grew dimmer Monday when the U.S. Commerce Department blacklisted a group of Chinese tech companies. The Trump administration charges that facial recognition and artificial intelligence technology developed by those companies is being used to repress China’s Muslim minority. Beijing demanded that Commerce reverse the move.

“We urge the United States to immediately correct its wrong practices, withdraw the relevant decisions and stop interfering in China’s internal affairs,” said Foreign Ministry spokesman Geng Shuang.

The Chinese Commerce Ministry warned in a separate statement that Beijing will “take all necessary measures to resolutely safeguard Chinese interests” but gave no details of possible retaliation.

The U.S. stock market tumbled Tuesday — the Dow Jones Industrial Average dropped 314 points, or 1.2% — partly on diminishing hopes for an end to the trade war.

“Given the current level of hostility (and) distrust between the two sides, the possibility of negotiating a durable and broad deal seems quite remote,” said Eswar Prasad, a Cornell University economist who formerly led the China division at the International Monetary Fund.

The Trump administration last year accused China of using predatory tactics in its drive to develop global competitors in advanced technologies such as quantum computing and electric cars. The administration alleges, and many China analysts agree, that these tactics include stealing sensitive technology and forcing foreign companies to hand over trade secrets.