US, China extend talks on trade battle

USS Mc Campbell departs Sydney Aus. July 2017

USS Mc Campbell departs Sydney Aus. July 2017

In another sign of subsiding worries about the USA economic outlook, Fed funds rate futures show traders are now pricing in a small chance of a rate hike in 2019, a change from late last week when futures markets had priced in a cut by the end of the year.

The talks went ahead despite tensions over the arrest of a Chinese tech executive in Canada on US charges related to possible violations of trade sanctions against Iran.

US SHUTDOWN: President Donald Trump's televised address Tuesday night helped soothe frazzled nerves over what steps he might take in the standoff with lawmakers over border wall funding, which has resulted in a partial government shutdown.

A private-sector source familiar with the talks said this could indicate that more detailed discussions were likely taking place. Mr. Trump said late Tuesday on Twitter.

In a statement, the office of U.S. Trade Representative Robert Lighthizer said the two sides considered ways to "achieve fairness, reciprocity, and balance in trade relations".

The global economy has been suffering from the chilling effect of a trade war between the world's two largest economies.

U.S. Commerce Secretary Wilbur Ross expressed optimism on Monday, telling CNBC that "there's a very good chance that we'll get a reasonable settlement". "I do talk with them and I give them my ideas and thoughts".

United States officials are expected to host China's top trade negotiator, Vice Premier Liu He, in Washington later this month, a source told CNN on Monday.

With cooling economic growth raising the urgency for a settlement, this week's talks went ahead despite tension over the arrest of a Chinese tech executive in Canada on USA charges related to possible violations of trade sanctions against Iran. Prior to the meeting, China made a number of concessions to US demands including temporarily cutting punitive tariffs on USA -made cars, promising to open up its markets for more foreign investment, and drafting a law to prevent forced technology transfers. They say China's companies are treated unfairly in national security reviews of proposed corporate acquisitions, though nearly all deals are approved unchanged.

Beijing has tried in vain to recruit France, Germany, South Korea and other governments as allies against Trump, but they have echoed USA complaints about Chinese industrial policy and market barriers.

Mr Ted McKinney, US under secretary of agriculture for trade and foreign agricultural affairs, said the US trade delegation is "wrapping up" meetings with Chinese officials and will return to the US later on Wednesday after a "good few days".

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China also restarted purchases of American soybeans last month, providing relief for a crop hit by Chinese retaliatory tariffs.

Last year, the United States imposed tariff hikes of up to 25 percent on $250 billion of Chinese goods.

Stock markets were roiled last week after Apple (APPL) warned it will badly miss its quarterly sales forecast because of weaker growth in China amid the trade war.

Liu's appearance at the talks is a "symbol of Xi's personal buy-in" in the effort to reach a deal, said Leland Miller, chief executive officer of China Beige Book, a data-analytics firm that surveys companies across the Chinese economy.

Companies disappointed about failures or delays in Beijing carrying out commitments want an enforcement mechanism with "some kind of penalty for not doing what they promised", said Parker.

But much work remains before the two economic powers climb down.

The United States has long complained about access to the vast Chinese market and Beijing's demands USA companies reveal their technology advances.

The discussions are the first face-to-face interactions between the USA and China since both presidents met in Argentina and agreed to a temporary truce in their tit-for-tat tariff war.

China's foreign ministry confirmed the negotiations had ended in Beijing but declined to comment on the outcome, saying details would be released later.

The White House is making sure this go-around is different.

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