- Commerce Secretary Wilbur Ross said the US and China are still “miles and miles” away from a trade deal.
- Thr US and China are currently in talks to end their trade war which has resulted in tariffs on $US360 billion worth of goods going between the two countries.
- The Trump administration set a March 1 deadline for the current truce, after which tariffs will increase.
- US stock futures slipped following Ross’s comments.
Commerce Secretary Wilbur Ross painted a relatively downbeat picture of the US-China trade deal talks on Thursday, igniting worries among investors that the trade war may not be close to an end.
Ross told CNBC that the two sides remain far apart on a deal to end the back-and-forth tariff fight that has tied up the world’s two largest economies for the better part of a year.
“There’s been a lot of anticipatory work done but we’re miles and miles from getting a resolution,” Ross said of the talks. “And that shouldn’t be too surprising trade is complicated, there are lots and lots of issues.”
The US and China are currently in the midst of a pause in the trade war after President Donald Trump and Chinese President Xi Jinping agreed during a dinner at the G20 summit in December to delay any new tariffs or escalation of current tariffs for three months. The deadline to make a deal is March 1.
The US has sent a delegation to China for formal talks and China’s top economic official, Liu He, is scheduled to come to Washington, DC, at the end of January.
Following Ross’ initial comments, stock futures began selling off, falling into negative territory. Asked about the swift, negative reaction to the “miles and miles” comment, Ross attempted to assuage concerns that a deal may not be reached.
“I believe China would like to make a deal. I believe we would like to make a deal, but it has to be a deal that works for both parties,” Ross said. “I’m trying to say people shouldn’t think the events of next week will be the solution to all of the issues between the United States and China.”
The Commerce Secretary also said the Trump trade team has not prejudged any possible deal and will evaluate whatever progress has been made between the two countries at the end of the truce period.
Trump’s team is currently led by US Trade Representative Robert Lighthizer, who is seen as generally more hawkish towards China than some pro-free trade members of Trump’s cabinet.
As it stands, the US and China currently have tariffs in place on $US360 billion worth of goods flowing between the two countries – the US has tariffs on $US250 billion worth of Chinese goods and the Chinese have tariffs on $US100 billion worth of US goods.
The US is attempting to use the pressure from the tariffs to force China into making fundamental changes to its economy, such as cracking down on the forced transfer of technology from US firms to Chinese firms and the theft of US intellectual property.
According to reports, China has so far only offered short-term solutions that would reduce the US-China trade imbalance but not reforms to key parts of their economic system.
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