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Despite tough talks, US-China trade negotiations continue

SHANGHAI – The combination on Friday of harsh words from President Trump and the interruption of a planned trip by Chinese farmers to two agricultural states appeared to cast a cloud over the prospects of a trade deal and caused a sale in New York stock trading.

But both sides moved on Saturday to indicate that negotiations are continuing.

China's state-run Xinhua News Agency said on Saturday that rather older negotiators had "conducted constructive discussions" in Washington in recent days and "agreed to continue to maintain communications." ”

The tone of the Xinhua statement was matched by a separate statement from the US Trade Representative in Washington. "These discussions were productive, and the United States looks forward to welcoming a delegation from China for major-level meetings in October," the statement said.

Both sides' trade negotiators have continued to look for a solution to their differences even as tensions became higher during the summer, said several people who know about the trade conversation. Everyone insisted on anonymity, citing diplomatic sensitivity in the negotiations.

The delegation of Chinese farmers who had planned to travel to Montana and Nebraska over the next week did not cancel the trip because of some new difficulties in the trade talks, two of these people said. Instead, the trip was interrupted by concerns that it would turn into a media circus and give the misleading that China was trying to meddle in American domestic politics, one of them said.

The Chinese government has long taken the position that countries should not interfere in each other's domestic affairs, a position partially developed in contrast to foreign criticism of China's human rights record.

In recent weeks, the Chinese government and many Chinese Internet users have also reacted angrily to calls from US officials to Beijing to show restraint in responding to increasingly violent protocols in Hong Kong. China's Foreign Ministry has repeatedly objected to what it describes as intervention in China's internal affairs over Hong Kong.

The question now is whether Deputy Prime Minister Liu He in China can make any progress when he comes to Washington for high levels next month. Although the dates of those calls have not been confirmed, they are likely to appear until Oct. 10 and 11, two of several people familiar with the trade talks said.

The biggest hurdle for negotiators can be to agree on the scope and ambitions of any business they are trying to reach. Several people familiar with the trade talks said in interviews over the past two weeks that China wanted to reach a partial agreement that would stave off President Trump's planned US tariff increases on Chinese goods October 15 and December 15.

China has become more cautious in recent weeks in seeking a comprehensive solution to the dozens of issues facing the two countries. Chinese negotiators have been trying to focus the talks on issues that can be resolved through regulations that the country must issue in early January, in response to a new foreign investment law approved by the National People's Congress in March.

At the same time, Chinese trade negotiators have tried to exclude issues such as data flows, data situation and set of cyber security standards this week. These issues tend to violate the turmoil of China's feared internal security agencies, which have resisted all limits to their ability to conduct comprehensive surveillance in the country and are wary of allowing US technology companies.

The United States has tried to persuade Beijing to adopt broad changes to Chinese laws to make the country more open to imports and to limit subsidies for industries, especially advanced manufacturing industries competing with US industries.

But President Trump on Friday opposed all partial agreements.

"I am looking for a full deal, I am not looking for a part-deal," Trump said on Friday during a joint news conference with Prime Minister Scott Morrison in Australia. "We are looking for the big deal."

There have nevertheless been some discussions between the two sides about lowering US tariffs that would only apply to Chinese goods worth $ 250 billion a year. That would be in place of the current $ 360 billion-a-year tariff for goods, which will increase further in mid-December, said people familiar with the talks.

The United States has pushed China to buy more American food in exchange – food that China may need as an epidemic of African swine fever has killed a large number of pigs in China.

The two sides have nevertheless implemented a series of small, confidence-building trade measures over the past two weeks. Each page has removed duties from a series of items, such as Christmas tree lighting sets from China and pork from the United States. China has also agreed to buy some soybeans this fall.

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