The United States and China fail to agree on major new steps to reduce the U.S. trade deficit with China, casting doubt over President Donald Trump's economic and security relations with Beijing. Ciara Lee reports.
No new announcements and one cancelled press conference. That's how the U.S. and China finished their annual economic pow-wow in Washington. One U.S. official said they failed to agree on most major bilateral trade and economic issues important to the U.S. These included demands for access to China's financial services markets, reducing excess Chinese steel capacity, and cutting subsidies for state-owned enterprises. Unable to reduce the U.S. trade deficit with China casts doubt over President Trump's relations with Beijing. (SOUNDBITE) (English) PANMURE GORDON CHIEF ECONOMIST, SIMON FRENCH, SAYING: "It does suggest there was some key impasses, in particular on steel and the reduction in state support for the Chinese steel industry which was a real campaign issue for Donald Trump. in the back end of last year. And played well with his base. The session had been billed as a follow-up to Trump's first meeting with Chinese President Xi Jinping in April. Trump hailed Xi's cooperation in curbing the threat from North Korea and said that it would lead to better trade terms for China. (SOUNDBITE) (English) PANMURE GORDON CHIEF ECONOMIST, SIMON FRENCH, SAYING: "Does that come back to that protectionist rhetoric, the idea of tariffs, does it come back onto the agenda. Particularly if the Trump administration is having difficulty in Congress getting through the domestic reform package, may he look internationally to shore up ahead of mid terms his case for America first. The Chinese embassy in Washington cast the talks in a more positive light, saying that both sides had acknowledged "significant progress". But investors interpreted the negative signals as making it more likely that Trump would go ahead with broad steel tariffs - sending US steelmakers' shares soaring.