US President Donald Trump’s administration was yesterday to resume negotiations with China toward ending a trade war that has deepened uncertainty for businesses and investors and dimmed the outlook for the global economy.
With the two sides meeting for the ninth time, analysts expressed optimism that the world’s two biggest economies might be near some kind of agreement.
Negotiators met in Beijing last week in talks that US Secretary of the Treasury Steven Mnuchin described as “constructive.”
Chinese Vice Premier Liu He (劉鶴), a close confidante of Chinese President Xi Jinping (習近平), was leading a Chinese team to Washington.
“We have been encouraged by the tone of the negotiations,” Myron Brilliant, head of international affairs at the US Chamber of Commerce, told reporters on Tuesday.
Brilliant estimated that the two sides are 90 percent of the way to an agreement, but cautioned that “the last 10 percent is the hardest part, the trickiest part.”
At the heart of the dispute are the Trump administration’s allegations that China steals technology and coerces US companies to hand over trade secrets — all part of Beijing’s zeal to overtake US technological dominance.
To pressure China, the US has imposed tariffs on US$250 billion in Chinese goods. The Chinese have counterpunched by taxing US$110 billion in US imports.
Tensions have eased somewhat since Trump met Xi in Buenos Aires late last year and the US administration ended up suspending its plans to raise tariffs on US$200 billion of the Chinese imports to buy time for negotiations.
“We’re making headway,” US National Economic Council Director Larry Kudlow said, describing the talks as “a larger, grander discussion than anything we’ve ever had in US-China relations.”
Analysts said that two major sticking points, in particular, stand in the way of any agreement.
First, Trump wants to preserve at least the 25 percent tariffs he has imposed on US$50 billion in Chinese imports as a way to maintain leverage over Beijing. China wants those sanctions lifted.
Second, the two sides must develop a mechanism to ensure that China honors any commitments it makes in an agreement.
The US administration complains that China has repeatedly failed to keep promises it made in previous trade talks.
The Chinese are widely expected to agree to buy substantially more US products — likely including soybeans and natural gas — to help narrow the US’ trade deficit in goods and services with China, which hit a record US$379 billion last year.
The US’ trade deficit with China has been a chronic complaint of Trump, although many economists say a bilateral trade gap is relatively insignificant.
Congressional Democrats and others have warned Trump against reaching any agreement that settles for more US exports to China without also requiring Beijing to adopt serious economic reforms.
DECOUPLING? In a sign of deeper US-China technology decoupling, Apple has held initial talks about using Baidu’s generative AI technology in its iPhones, the Wall Street Journal said China has introduced guidelines to phase out US microprocessors from Intel Corp and Advanced Micro Devices Inc (AMD) from government PCs and servers, the Financial Times reported yesterday. The procurement guidance also seeks to sideline Microsoft Corp’s Windows operating system and foreign-made database software in favor of domestic options, the report said. Chinese officials have begun following the guidelines, which were unveiled in December last year, the report said. They order government agencies above the township level to include criteria requiring “safe and reliable” processors and operating systems when making purchases, the newspaper said. The US has been aiming to boost domestic semiconductor
Nvidia Corp earned its US$2.2 trillion market cap by producing artificial intelligence (AI) chips that have become the lifeblood powering the new era of generative AI developers from start-ups to Microsoft Corp, OpenAI and Google parent Alphabet Inc. Almost as important to its hardware is the company’s nearly 20 years’ worth of computer code, which helps make competition with the company nearly impossible. More than 4 million global developers rely on Nvidia’s CUDA software platform to build AI and other apps. Now a coalition of tech companies that includes Qualcomm Inc, Google and Intel Corp plans to loosen Nvidia’s chokehold by going
ENERGY IMPACT: The electricity rate hike is expected to add about NT$4 billion to TSMC’s electricity bill a year and cut its annual earnings per share by about NT$0.154 Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has left its long-term gross margin target unchanged despite the government deciding on Friday to raise electricity rates. One of the heaviest power consuming manufacturers in Taiwan, TSMC said it always respects the government’s energy policy and would continue to operate its fabs by making efforts in energy conservation. The chipmaker said it has left a long-term goal of more than 53 percent in gross margin unchanged. The Ministry of Economic Affairs concluded a power rate evaluation meeting on Friday, announcing electricity tariffs would go up by 11 percent on average to about NT$3.4518 per kilowatt-hour (kWh)
OPENING ADDRESS: The CEO is to give a speech on the future of high-performance computing and artificial intelligence at the trade show’s opening on June 3, TAITRA said Advanced Micro Devices Inc (AMD) chairperson and chief executive officer Lisa Su (蘇姿丰) is to deliver the opening keynote speech at Computex Taipei this year, the event’s organizer said in a statement yesterday. Su is to give a speech on the future of high-performance computing (HPC) in the artificial intelligence (AI) era to open Computex, one of the world’s largest computer and technology trade events, at 9:30am on June 3, the Taiwan External Trade Development Council (TAITRA) said. Su is to explore how AMD and the company’s strategic technology partners are pushing the limits of AI and HPC, from data centers to