Mnuchin terms trade talks with China ‘productive’

Top US and Chinese trade negotiators had "productive meetings", US Treasury Secretary Steven Mnuchin said in a tweet on Friday, as the world's largest economies wound down two days of high-level talks to resolve their bruising trade war.

Mnuchin did not elaborate on the discussions he and US Trade Representative Robert Lighthizer had with Chinese vice premier Liu He, a top economic advisor to president Xi Jinping, who the two US officials met later on Friday in Beijing.

The US delegation had a banquet with Chinese counterparts at a Beijing hotel on Thursday night, a person with knowledge of the meetings said. But neither country had offered details on how the two sides might de-escalate a tariff war that has roiled financial markets and disrupted manufacturing supply chains.

US duties on $200 billion worth of imports from China are scheduled to rise to 25 per cent from 10 per cent if no deal is reached by 1 March to address US demands that China curb forced technology transfers and better enforce intellectual property rights.

Although US president Donald Trump said earlier in the week that an extension of the deadline was possible if a "real deal" was close, Larry Kudlow, director of the National Economic Council, said the White House had made no such decision.

Several sources informed about the meetings told Reuters there was little indication negotiators had made major progress on sticking points to pave the way for a potential meeting between Xi and Trump in coming weeks to hammer out a deal.

"Stalemate on the important stuff," said one of the sources, all of whom requested anonymity because the talks are confidential.

"There's still a lot of distance between parties on structural and enforcement issues. I wouldn't quite call it hitting a wall, but it's not a field of dreams either," said a second source.

The Financial Times cited sources as saying the two sides were trying to reach a memorandum of understanding to help bring about a leaders meeting.

A third source told Reuters the White House was "irate" over earlier reports that the Trump administration was considering a 60-day extension to the tariff deadline.

Lighthizer and Mnuchin left their Beijing hotel on Friday afternoon without taking questions from reporters.

'Sleight of Hand'

Reuters reported earlier that in recent meetings China has pledged to make its industrial subsidy programs compliant with World Trade Organisation rules and end those that distort markets, but had offered no details on how it intends to achieve that goal.

The offer has been met with scepticism from US negotiators, in part because China has long refused to disclose its subsidies.

And some in US industry have been unimpressed with the extent of other reported Chinese offers to address US concerns, such as Beijing's proposal to increase purchases of US semiconductors to $200 billion over six years.

John Neuffer, President and CEO of the Semiconductor Industry Association (SIA), told Reuters that the offer would be "akin to an accounting sleight of hand" and "an attempt to rearrange our supply chains and drive them deeper into China".

"We are confident US government negotiators will wisely dismiss this offer and continue pushing for meaningful reforms that create a fair and level playing field for US companies doing business in China," Neuffer said.

The proposal, first reported by the Wall Street Journal, was part of a "recycled" package of goods purchase offers that Beijing first presented in the spring of 2018, a source told Reuters on Thursday.

Many US lawmakers and business groups have urged Trump in recent weeks not to settle for an agreement based largely on increased Chinese purchases of farm and energy commodities.

Trump has said he did not expect to meet with Xi before 1 March, but White House spokeswoman Sarah Sanders has raised the possibility of a meeting between the leaders at the president's Mar-a-Lago retreat in Florida.

China has long denied Washington's accusations of trade abuses, and it has retaliated to US tariffs with its own duties on American goods.

Some trade experts say China appears focused on securing a Xi-Trump meeting, in the hope that it would make a near-term deal to limit or reduce tariffs more likely.