Here are some of the major issues that stand in the way of a US-China trade deal

  • Trade negotiations between the US and China stalled this month.
  • The US said China reneged on previous commitments in a draft agreement, leading both sides to raise tariffs on each other.
  • Those reversals included the central issues the US raised when it ignited a trade war with China last year: intellectual property rules, government subsidies, and enforcement mechanisms.

Trade negotiations between the world’s largest economies stalled this month after the US said China reneged on previous commitments in a draft agreement, leading both sides to raise tariffs on each other.

According to Reuters, those reversals included the central issues the US raised when it ignited a trade war with China last year: intellectual-property rules, government subsidies, and enforcement mechanisms.


Intellectual-property rules

The US has long accused the Chinese government of facilitating the forced transfer of foreign technology, a claim Chinese officials have denied.

In a 2017 report, the US Trade Representative said Chinese theft of American intellectual property cost between $US225 billion and $US600 billion annually.


Government subsidies

The Chinese government has long sought to support high-tech and industrial companies through large-scale state subsidies, another longtime sticking point in negotiations with the US.

US Trade Representative Robert Lighthizer and other negotiators have worked to eliminate these “market-distorting” practices, which would require China to alter a major structural aspect of its economy.


Enforcement mechanisms

Feng Li/Getty Images

The US has struggled to enforce trade rules with China in the past, and any deal would only add to a list of commitments to track. China has been reluctant to require that its pledges be codified into laws at home, a stipulation Lighthizer views as crucial to a final agreement.

The Trump administration has in the past suggested the prospect of tariffs as leverage, a proposal that would be sure to cast further uncertainty on businesses and consumers. Meanwhile, China has demanded that all tariffs be lifted.


Technology

President Donald Trump last week signed an executive order banning communications technology from “foreign adversaries” in a move seen as targeting the company Huawei Technologies and others with alleged ties to the Chinese government.

Google said it would suspend Huawei’s Android licence on Monday, drawing further ire from Beijing.


SEE ALSO:

The top false claims Trump makes about trade

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.