US President Donald Trump and President Xi Jinping set a 1/3 deadline for officials of both sides to negotiate a "structural change" agreement with the Chinese economic model. If the negotiations fail, Mr Trump has announced he will increase the tax rate from 10% to 25% for $ 200 billion of goods imported from China. The collapse of talks can break the hopes of a permanent "cease-fire" regime that can eliminate one of the darkest clouds that cast a shadow over the world economy.
Chinese Deputy Prime Minister Luk Hack will meet with Washington Trade Representative Robert Lahtiser in talks to be held on 2, 30 and 31 January. They will discuss discussions that focus on many issues from China to buy US soybeans for subsidies that China gives to its state-owned companies.
Despite the announcement of an agreement that is not expected to happen this week, it is likely that the negotiators will come up with a proposal for a package to present to both of their leaders, William Raysch, the former. Commercial employees under the Clinton administration said.
"Everyone is divided because President Trump is hard to guess," said Reyns, now senior adviser at Wahsington's Strategic and International Research Center (CSIS). – The ability to accept it is 50-50.
3 main scenarios
Bloomberg There are three main scenarios for trade talks between the two largest economies in the world.
The first scenario is a basic agreement between the two countries. Accordingly, although Liu and Lighthizer have reached a basic agreement this week, it will take time for both American and Chinese leaders to determine whether they are satisfied. The US news agency said that Liu or Lighthizer should not be expected much, as they are rarely revealed to reporters for talks.
This means only through official statements on how the negotiation process is progressing. After the latest talks in Beijing, the two sides made separate statements. The US has said it has made progress on issues such as the purchase of US goods, but added that any agreement would require "continuous verification and effective enforcement". China calls the talks "broad, deep and detailed."
The Most Innovative Scenario China will reach the negotiating table with an ambitious proposal for economic reform compared to previous expectations. This could convince Lighthizer, a tough Chinese man who once said that in order to make progress with Beijing, it may take several years for Beijing to be serious about opening the market. That may be enough for Mr. Trump or the White House to praise a deal. Markets can welcome the fire after months of terrible fears of a global trade war.
The problem is that China needs a proposal to change the game to show that they are serious about relieving state control over the economy. "The United States wants widespread changes in China's control of corporations. It's hard to do that, "said David Lowinger, a former US Treasury official.
Third scenario If there is no agreement after the negotiations, wait and see. Mr Trump may soon be speaking on Twitter, expressing his anger that he is not making progress.
Mr. Trump has shown his previous attitude. In May, the two countries issued a joint statement in which China agreed to increase exports of agricultural and energy products and announced the importance of protecting intellectual property. Within a few days, Mr Trump canceled the agreement and the officials returned to the negotiating table.
Such a reaction by Trump could lead to the freezing of negotiations for a long time. Now that will largely depend on how officials in his administration, including Lighthizer's sales representative, White House Advisor Peter Navarro and Secretary of Wilbur Ross Trade, will respond to China's proposals.
"What worries me is that in the past year, the balance of power has shifted to China's" hawks ", and it is unclear what the US can say" yes "(with China's proposal)," said David Lowinger.
If the US side does not agree, it may take a long time before the next diplomatic shuttle between Washington and Beijing begins.