Digital trade is stumbling block in US-China trade talks



James Politi and Tom Mitchell | Financial Times

China is refusing to budge on US demands that it relax its restrictions on digital trade — a priority for America’s largest technology companies and one of several remaining obstacles to an agreement between Washington and Beijing.

According to three people briefed on the talks, China has yet to offer meaningful concessions on US requests that it end discrimination against foreign cloud computing providers, curb requirements for companies to store data locally, and loosen limits on the transfer of data overseas.

The impasse over digital trade is among the issues expected to be on the table when Robert Lighthizer, the US trade representative, and Steven Mnuchin, the Treasury secretary, travel to Beijing on March 28 for meetings with Liu He, China’s vice-premier and leading economic official. Mr Liu is expected to return to Washington the following week, and the two sessions combined could be pivotal for the fate of the talks.

Should they be successful, a final deal could be in store between Donald Trump, the US president, and Xi Jinping, the Chinese president, as early as late April. But should they fail, an agreement could be delayed, adding to global uncertainty, or the negotiations could collapse entirely and tariff escalation could resume, dealing a blow to financial markets and the global economy.

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