Why have the US-China trade negotiations stalled — and what will Presidents Donald Trump and Xi Jinping need to do to revive the talks when they meet in Japan this week?
The US administration’s current position reflects an internal division. One faction wants to decouple the American economy from China; this group favours tariffs, barriers to cross-border investment, and uncertainties that would compel companies to break supply chains. The other faction seeks to change China’s practices in order to boost US exports, protect intellectual property and technology, and counter discrimination against overseas investors; these actions would expand American economic ties with China. To reconcile these conflicting aims, the compromise has been to make extraordinary demands — and rely on Mr Trump’s instincts to decide whether to do a deal.
The principal problem in the negotiation now is what America will do in return if China takes steps to open markets, buy goods, and secure US interests. For now, Washington has insisted on retaining the tariffs it imposed until Beijing delivers on its promises. US negotiators also want the right to reimpose tariffs whenever America chooses — and to prohibit Chinese retaliation.