KEY POINTS

  • China and the U.S. have sanctioned officials of each other’s governments
  • U.S. has strongly condemned China's security law in Hong Kong
  • Trump has also threatened to ban Chinese-owned apps TikTok and WeChat over national security fears

The U.S. and China have postponed trade review talks that had been planned for this weekend.

Bloomberg reported video conference discussions between Chinese Vice Premier Liu He, U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin – which were designed to review the status of the phase 1 trade deal signed in January – will be rescheduled.

The South China Morning Post has reported the talks were set for Saturday, but Zhao Lijian, a spokesman for Chinese foreign ministry, said details on the talks will be released “in due course.”

On Thursday, Larry Kudlow, the White House’s senior economic adviser, said the trade deal was going well.

But since the January phase 1 trade deal was inked, tensions between Washington and Beijing have worsened, partly because Trump repeatedly has blamed China for the spread of the COVID-19 pandemic and over China’s imposition of a controversial national security law in Hong Kong.

China and the U.S. have sanctioned officials of each other’s governments while Trump has also threatened to ban Chinese-owned apps TikTok and WeChat as a result of national security fears.

U.S. Secretary of State Mike Pompeo recently suggested that the U.S. may also impose similar bans on other Chinese companies.

The two economic superpowers have also imposed – or vowed to impose -- tariffs on billions of dollars of each others’ goods. (Although under terms of the phase 1 trade deal, the U.S. agreed to reduce some tariffs in exchange for China buying more U.S. agricultural and manufacturing products and vowing to clamp down on intellectual property theft).

"Both sides will be doing a temperature check to see where things stand since January, and indeed they have a lot to talk about," Nick Marro, a global trade expert at the Economist Intelligence Unit told the BBC. "At the very least, we expect policymakers in Beijing to now be questioning their commitment to a trade deal that has done little to protect Chinese companies from U.S. pressure."

The White House has also made threats against Chinese tech giant Huawei, and the U.S. Senate has passed legislation designed to remove Chinese companies from U.S. stock exchanges.

"The U.S. government will take further measures to prevent U.S. data from being stored on cloud-based systems owned by Chinese firms as well as impacting upon the use of undersea cables connecting the U.S. to the global internet," said Rajiv Biswas, a chief economist at the London-based consultancy IHS Markit. "Given the wide range of differences between the U.S. and China, it may be difficult to achieve further significant progress in the upcoming round of trade talks.”

Marro added: "Our baseline view is that the deal will remain intact after the meetings. It would be just too costly, for both sides, to terminate it now.”

ForeignPolicy.com commented that Trump’s view of the Chinese will likely be guided by his reelection bid.

“The economic slowdown coupled with Trump’s overwhelmingly unpopular pandemic response leave him with few issues on which to sell his reelection bid, and he is making getting tough on China one of his signature campaign issues,” ForeignPolicy wrote. “But Trump is walking a tightrope. The trade deal commits China to purchasing agricultural products from U.S. farmers, among whom Trump has cultivated a strong base, so one of his key priorities will be ensuring that China meets its pledge to purchase U.S. agricultural goods.”