uploads///A_Semiconductors_stock reaction of US CHina trade talks

How US-China Trade Talks Are Progressing

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Dec. 4 2020, Updated 10:53 a.m. ET

Issues between the United States and China

Previously in this series, we saw that after seven months of the trade war and failed negotiations, the United States and China (FXI) are finally showing some concrete commitments. A Reuters article stated that the two parties are drawing up memoranda of understanding on some of the issues that caused the trade war.

The United States accused China of forcing US companies to share their technology and intellectual property with local companies in order to do business in the country. The United States also objected on China’s non-tariff barriers like industrial subsidies, regulations, business licensing procedures, and product standards reviews that favor domestic products over US products.

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Which direction are trade talks heading?

The sources cited by Reuters stated that negotiators are drawing up six memoranda of understanding on structural issues including forced technology transfer and cyber theft, intellectual property rights, and non-tariff trade barriers. The work on the memoranda is a significant step toward negotiating broad principles and specific commitments on the key issues listed above. Among the specific commitments are issues surrounding Micron (MU) and Fujian Jinhua.

Some Chinese government sources told Reuters that they’re negotiating the terms of an agreement but that some issues are complex to resolve. The two parties are looking to reach agreements before the March 1 deadline, but the deadline could extend. However, the tariffs won’t rise to 25% on March 1, according to US President Donald Trump’s tweet.

Next in this series, we’ll look at some of the most pressing issues between the United States and China that affected semiconductor companies.

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