Summary: On January 31, Chinese Vice-Premier Liu He ended two days of talks in the U.S. by delivering a letter from Chinese President Xi Jinping, stating that China hopes both sides will meet in the middle. Trump called the letter “beautiful” and said it is possible that he and Xi would meet more than once before March 1. A statement from the White House described the negotiations as “intense and productive.” The issues covered by the talks include: forced technology transfer, intellectual property protection, and other barriers faced by American companies in China.
Importance: This suggests that China and the U.S. are working to end the trade war and reach an agreement in bilateral trade before the March 1 deadline. A positive outcome could lead to the immediate reduction of tariffs on both sides.
Opportunity & Risk for Business: U.S. companies should expect some positive movement on China’s regulations towards foreign brands. Companies in the U.S. and China will reap the benefit from reduced tariffs and non-tariff barriers but will likely see a form of graduated reduction. However, companies shouldn’t expect any substantive structural or regulatory changes immediately accompanying a reduction in tariffs. Change is a slow process and China, like any other country, faces a wall of bureaucracy.
Sources: South China Morning Post, China Daily
Analyst Bio’s
Tong Wu: Tong Wu is a volunteer contributor and Georgetown graduate student who writes on U.S.-China business issues. She has experience as a field study consultant with PwC, communications & marketing at Georgetown University, and has previously worked as a freelance writer.
Brandon Hughes: Brandon is the Senior Analyst and Founder of FAO Global. He served as a government adviser and led military teams in Afghanistan, supported peace keeping operations in Europe, led corporate security teams in Las Vegas, and conducted strategic U.S.-China focused research for the prestigious Carnegie Endowment & Asia Society. Brandon leads FAO Global to conduct cross-border international business ventures between the U.S., China, and emerging markets in Asia.
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