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China and the US just agreed to a fresh set of trade war negotiations - but the government shutdown threatens to derail any progress

Business Insider | Jan 11, 2019, 03.51PM IST

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Oliver Contreras/Getty; Greg Baker/Getty; Shayanne Gal/Business Insider

US President Donald Trump and Chinese President Xi Jinping

  • The US and China have agreed to go ahead with a further set of trade negotiations at the end of January, the Wall Street Journal reports.
  • Fresh talks follow a productive but ultimately fruitless set of negotiations in Beijing this week.
  • The talks, however, could be delayed by the ongoing shutdown of the US government, officials with knowledge of the discussions warned.
  • On Saturday, the shutdown will become the longest in US history.

The US and China have agreed to go ahead with a further set of trade negotiations at the end of January, with more senior officials from both sides set to participate in the talks, to be held in Washington DC, the Wall Street Journal reported Friday.

A Chinese delegation sent from Beijing will be led by Liu He, China's vice premier, its most senior trade official, and one of President Xi Jinping's closest allies. The US delegation will be headed by Robert Lighthizer, the US trade representative, and Steven Mnuchin, the Treasury Secretary.

According to the Journal, talks are set take place on January 30 and 31, but could ultimately be derailed by the ongoing shutdown of the US government over funding for President Trump's hugely controversial wall on the southern border with Mexico.

The shutdown is now over 20 days old, and if a compromise is not reached on Friday, it will on Saturday become the longest in US history.

Read more: The government shutdown threatens the US with a credit-rating cut for only the 2nd time in history

News of fresh talks comes just two days after the end of talks between more junior officials from both states in Beijing earlier in the week. A US delegation led by Jeffrey Gerrish, the deputy trade representative, visited the Chinese capital at the start of this week, holding talks that were productive but did not yield any major breakthroughs.

During the talks, a US statement released after they finished said, the delegates discussed "ways to achieve fairness, reciprocity and balance in trade" between the two nations, and agreed that any trade deal needed to provide "complete implementation subject to ongoing verification and effective enforcement."

This week's talks, and the talks scheduled for the end of January, are part of an ongoing dialogue between the US and China after a tentative agreement was made at November's G20 summit in Buenos Aires, Argentina.

That agreement saw China commit to renewed purchases of US agricultural goods like soybeans, in return for the delay of a fresh swathe of tariffs Washington was set to impose on Chinese goods.

Numerous sticking points remain, however, including Washington's desire for better protection of American intellectual property in China, and the further opening of Chinese markets to foreign companies.

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