U.S. Opens Trade Talks With China President Trump has threatened to increase and expand on about $250 billion in tariffs, but he agreed to hold off until early March, while negotiators try to hammer out a deal.
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U.S. Opens Trade Talks With China

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U.S. Opens Trade Talks With China

U.S. Opens Trade Talks With China

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MARY LOUISE KELLY, HOST:

The world's two biggest economies are trying to resolve a trade war that has rattled nerves and markets on both sides of the Pacific. The U.S. and China began a new round of trade talks today here in Washington. Negotiators have just over a month to make a deal or run the risk of more tariffs. NPR's Scott Horsley reports.

SCOTT HORSLEY, BYLINE: Photographers got a quick peek this morning as the high-level talks got underway in the diplomatic reception room next door to the White House. U.S. Trade Representative Robert Lighthizer sat on one side the polished conference table directly across from China's vice premier, Liu He. President Trump often complains about America's trade deficit with China, which has only grown in the last two years. White House economic adviser Larry Kudlow says one goal of these talks is a bigger opening for U.S. exports.

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LARRY KUDLOW: Give our people the chance to sell to China. We will export a ton. Our export sales will roar - roar.

HORSLEY: China has already signaled a willingness to buy more American goods such as soybeans and natural gas. But U.S. negotiators are also looking for more structural reforms, including an end to China's intellectual property theft and the forced transfer of American technology. On Monday, the Justice Department unsealed an indictment against the Chinese telecom giant Huawei, accusing that company of trying to steal trade secrets from an American firm, T-Mobile. While the administration says that criminal case is not related to these trade talks, it does illustrate a longstanding U.S. complaint about the way China does business.

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JOHN DEMERS: The playbook is simple - rob, replicate and replace.

HORSLEY: John Demers heads the Justice Department's National Security Division. At a Senate hearing last month, he described a deliberate Chinese strategy of economic espionage.

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DEMERS: Rob the American company of its intellectual property, replicate that technology and replace the American company in the Chinese market and, one day, in the global market.

HORSLEY: Syracuse economist Mary Lovely, who's a former editor of the China Economic Review, says Beijing has taken some steps to address the U.S. concerns. In recent months, China has increased penalties for stealing intellectual property and has moved to outlaw the forced transfer of technology.

MARY LOVELY: Will that be enough? I don't know. But the Chinese have certainly signaled that they're willing to make structural reforms.

HORSLEY: China has a history, however, of backsliding on such promises. So U.S. officials say whatever is agreed to will have to be enforceable. Commerce Secretary Wilbur Ross told CNBC both countries want to make a deal, but he doesn't expect any quick breakthroughs.

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WILBUR ROSS: We're miles and miles from getting a resolution. And, frankly, that shouldn't be too surprising.

HORSLEY: Still, Lovely sees some encouraging signals, including the presence of a high-ranking Chinese delegation here in Washington and the planned meeting tomorrow between Vice Premier Liu and President Trump.

LOVELY: Those certainly are signs that the parties believe that some type of deal could be done.

HORSLEY: The alternative could be costly unless there's a deal or at least an agreement to keep talking by the beginning of March. The administration has threatened to increase tariffs on some $200 billion worth of Chinese imports from 10 to 25 percent. Lovely says that wouldn't be good for anyone.

LOVELY: The tariff battle, I think, has been fairly mindless. A lot of the tariff revenue is coming out of American consumers' pockets.

HORSLEY: The administration says China is under pressure to make a deal because of its slowing economy, but American companies have also felt the pain of China's slowdown, and that could create pressure on U.S. negotiators as well. Scott Horsley, NPR News, the White House.

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