(Bloomberg) –
U.S. and Chinese negotiators plan to discuss the progress of their trade agreement in the coming days, with Beijing pushing to broaden the agenda to address Washington’s recent crackdown on companies including TikTok and WeChat.
A virtual meeting is likely to take place as soon as this week, although a date has not been finalized, according to people familiar with the preparations for the talks who asked not to be named. President Donald Trump’s chief economic adviser on Tuesday raised concerns about the phase-one agreement will fall apart.
Along with agricultural purchases and the dollar-yuan exchange rate, Chinese officials are aiming to impose Trump’s potential ban on transactions with the two apps on national security grounds, the people said without elaborating on what China hopes to achieve through this. to do.
Nearly seven months after a White House signing ceremony ended a tariff war that swept the global economy, Beijing’s promise to buy US goods is far behind schedule. The crisis of coronavirus and the decline in relations between US and China over everything from tech security to Hong Kong have left trade a rare area of cooperation.
GLOBAL INSIGHT: Adding China’s Phase-1 Trade Deal Import Miss
The “one area we do is trade,” Larry Kudlow, director of the White House National Economic Council, said at a White House press conference Tuesday. “It’s fine at the moment.”
At a briefing in Beijing on Wednesday, Foreign Ministry spokesman Zhao Lijian said China’s position on phase one remains consistent. TikTok, he said, “is simply a platform for entertainment, leisure, the show of talents and sharing for American people and people around the world. It has nothing to do with national security. ”
In the US, Trump’s treatment of China appears to be a political weapon for Democrats trying to oust him in November. It was three years ago this month that the Trump administration began an investigation into China’s treatment of American intellectual property that would help form the foundation of a trade war that would lead to tariffs of about $ 500 billion in products shipped among the world’s largest economies.
Now, less than three months before Trump’s re-election bid, the pandemic that has erupted in China’s administration is struggling to strike a balance between showing toughness and sticking to an agreement that does not live up to Beijing’s promises.
‘It’s about farmers’
Scott Kennedy, a China expert at the Center for Strategic and International Studies in Washington, told Bloomberg Television this week that “it’s amazing that despite the storm that is now the US-China relationship, neither Trump nor Xi Jinping phase really want -a deal. ”
“For Trump, it’s about one word about farmers – the sales they can make to red states in these elections,” Kennedy said, referring to rural strongholds for Republicans. For Chinese President Xi, “it’s about stability and keeping the relationship falling apart,” he said.
China seeks to exploit an unpredictable confrontation with the US, which has targeted several of its tech champions, with the latest actions encouraging a potential sale of the US operations of ByteDance Ltd’s wildly popular short video app Microsoft Corp. Trump also bans U.S. transactions with Tencent Holdings Ltd.’s WeChat app, which has more than 1 billion users.
Trump’s executive orders, set to take effect in September, could potentially have an even wider impact than the multifaceted attack on telecommunications hardware supplier Huawei Technologies Co., as they threaten communications ties among the people of the largest economies. to be separated from the world. The US states that Chinese apps that collect information about American citizens pose a serious national security risk because the data tends to be obtained by the Chinese government.
Given the collapse of the world economy this year linked to the pandemic that Trump has repeatedly blamed on China, Beijing was only a quarter of the way through his attempt to end this year at the end of June by more than $ 170 billion to buy American goods.
On Tuesday, Kudlow narrowed the deficit, saying China had “substantial” “purchases” of U.S. goods.
China would have to buy about $ 130 billion in the second half of this year to meet the original terms of the January agreement, which included the purchase of an additional $ 200 billion in U.S. goods and services over the level of 2017 to the end of 2021.
(Adds background, analysts’ comments in paragraphs 7-10)
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