US-China relations have entered a critical phase. Many international analysts believe the dispute will continue as long as Trump remains at the forefront of Washington's political and executive equations.

Donald Trump's protectionist policies are strongly put under question in the US. Although some people are supporting these policies, others firmly believe that Trump lacks the necessary seriousness that is the prerequisite of such big steps, and thus he's incapable to direct these policies.

As a result, the US economy will be vulnerable in the long run. Moreover, it seems that Trump wasn't able to achieve his economic goals in the international system up to now. The existing evidence shows this very well. Accordingly, one of the most important issues is the economic relationship between China and the United States of America.

US-China relations continue to decline during the Trump presidency. Of course, there were disagreements between Beijing and Washington over security and cyber-security issues at the time of Barack Obama, but the emergence of trade and economic disputes in their bilateral relations should be analyzed "beyond a simple controversy." In other words, from the beginning of 2017 and Trump's presence at the top of the political and executive equations of the United States, we have witnessed the emergence of constant crises and challenges in the relations between Washington and Beijing. Many international affairs analysts rightly believe that the conflict is not limited to economic and commercial issues, and it will also affect the political, security and regional spheres.

Can fresh US-China talks end the trade war?

BBC reported that Top trade negotiators from the US and China are meeting for the first time in almost three months on Tuesday to try and do a deal, but expectations are low. Still, while there's been an apparent lull since the two sides last sat down and talked, there's been plenty going on under the surface. There's now fresh evidence to show just how much the trade war is hurting both China and the US. Here are three sore points between them that are adding yet another layer of complexity to the negotiations. Much ado about  Huawei.
The US is stepping up its attacks on Huawei. In May, the US slapped an export ban on American companies from selling to Huawei on national security grounds.

While this didn't cripple Huawei's business, it rattled the tech sector around the world. Companies from Japan to the US were worried about the impact of the ban on their supply chains, as they too carried products for Huawei with US parts inside. Trade war infects Asia as exports plunge

Firms look to new factories as tariffs bite

A quick guide to the US-China trade war

But suddenly in June at the G20 summit, US President Donald Trump appeared to soften his stance on Huawei, by announcing that the US would allow some American companies to sell to the Chinese firm.

Since then, though, there's been confusion in the Trump administration over which companies can sell their products to Huawei and what they can sell.

Back in Beijing, there's a sense that this move by President Trump was less a carrot to China and more about listening to the powerful US tech lobby, which had complained it was being shut off from a paying customer.

For China, Huawei is about more than just business. It is a national champion. Beijing sees the US move as an attack not just on Huawei, but on China's ambitions to succeed on the international stage.

Still, President Trump's apparent U-turn on Huawei doesn't mean that Washington is letting the Chinese company off the hook. It has become the bogeyman the US uses as a symbol of everything that's wrong with the Chinese economy, accusing Huawei of receiving state support and of close links to the Chinese government - all of which the firm denies.

Promises, promises: Agriculture wars

One of the key sticking points between China and the US has been agriculture. The trade dispute has seen Beijing target US farmers, including those supplying agricultural products such as meat, grains, and soybeans, in retaliation for tariffs on Chinese products.

But in an apparent goodwill gesture at the weekend, ahead of the talks, China said it had bought several million tonnes of soybeans from the US since President Trump and President Xi met at the G20 in June.

A clear signal from the Chinese that they are willing to buy more grains from the US would be seen as positive by Washington, helping to smooth over sensitivities on agriculture. Beijing has indicated it could buy more agricultural products from the US.

But a lot will hinge on how the talks go over the next few days and how much trust can be built between the two sides.

Warning signs

That lack of trust between China and the US is filtering into the real world. In just the last three months, we've seen another wave of data that shows fresh cracks in the global economy due to the trade war. Exports from China and the rest of Asia are falling at a dramatic pace.

Part of the reason is China's slowdown, but the other reason is increasingly the trade war.

Companies are holding off on expansion plans as they decide whether to move out of China, which means new factories aren't being built and new jobs aren't being created. That's led to fresh warnings about the risks that the trade war poses to the global economy from institutions such as the International Monetary Fund (IMF). The IMF cut its growth forecasts for the global economy for this year and the next, citing the trade war as one of the key reasons.

Meanwhile, US economic data on Friday showed that the US economy grew less than previously thought last year. The figures showed that foreign trade and business investment shrank as the US continued its trade war with China.

All of this underlines just how important it is that the US and China come to a resolution on trade. But given that the last three months of no talks have seen them grow even further apart, negotiations are in an even more precarious state than before.

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U.S. and China Open a New Window.  we're heading into another round of trade negotiations Opens a New Window.  Tuesday in Shanghai.

Investors are hoping Beijing and Washington will avoid another escalation in tariffs like the one that occurred after talks collapsed in May. Officials have downplayed the potential for a breakthrough, however, since the same issues that caused talks to bog down earlier remain.

Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer will meet on Tuesday and Wednesday in Shanghai with a delegation led by China's economy czar, Vice Premier Liu He.

A working dinner is reportedly scheduled for later with talks scheduled for Wednesday. The talks resume amid an array of disputes that has grown to include tension over Chinese tech giant Opens a New Window.  Huawei.

President Trump in a series of tweets said that negotiations with China could get tougher.

Presidents Donald Trump and Xi Jinping agreed in June to revive efforts to end the costly fight over China's technology ambitions and trade surplus.

Trump has repeated his claim that the United States is prospering by "taking in tens of billions of dollars" from his tariff hikes on Chinese products. In reality, those are paid by U.S. companies and often trickle down to consumers who buy Chinese goods. Chinese leaders are resisting U.S. pressure to roll back plans for government-led development of industry leaders in robotics, artificial intelligence, and other technologies.

Washington complains those efforts depend on stealing or pressuring foreign companies to hand over technology. The June agreement to resume negotiations helped to calm jittery financial markets despite warnings by economists that with both sides still far apart on critical issues, the fragile truce likely will soon fall apart.

Tensions worsened when, after talks broke down in May, the Trump administration imposed curbs on U.S. technology sales to Huawei, the biggest global maker of network gear for phone companies and the No. 2 smartphone brand. U.S. officials view Huawei as a national security threat and warn that its equipment could be used for cyberespionage.

"The only problem with these deals is the have internal, domestic politics to deal with," Laffer told FOX Business. "China has domestic industries to deal with that are tough, and so [does the U.S.]. The steel industry doesn't want a great deal. There are a lot of industries that don't want it. It's tough to make it happen."

The tariff hikes are battering exporters on both sides and disrupting trade in goods from soybeans to medical devices. China's imports of American goods fell 31.4 percent in June from a year ago while exports to the United States fell 7.8 percent.

China agreed earlier to narrow its multibillion-dollar trade surplus with the United States by purchasing more American soybeans, natural gas, and other exports. But it revoked that pledge after one of Trump's tariff hikes last year.
"Both countries want a good deal," Laffer told FOX Business. "It's a win-win for everyone in the world."

The US and China are talking again. But they're still trading accusations

As CNN reported, US and Chinese trade negotiators are soon expected to meet face-to-face for the first time since their leaders declared a temporary truce in late June.

But a quick end to the trade war isn't a sure bet. After all, the last month hasn't been easy on the relationship between Washington and Beijing.

On Monday, Huawei — a company that President Donald Trump has suggested could be a bargaining trip in trade negotiations — was the subject of a report that claimed it may have violated US sanctions on North Korea. The next day, the Chinese tech firm announced it would lay off US staff, a decision it blamed on American restrictions on its business.

Complicating matters even more, the United States slapped sanctions on a Chinese company this week for violating a ban on buying Iranian oil. After that announcement, China didn't mince words: The country slammed what it called Washington's "bullying" behavior.

Even so, trade talks between the two countries seem poised to step up a gear. US trade negotiators are expected to travel to China next week to resume working-level talks on a trade agreement, a person familiar with the plans told CNN. Officials have been talking by telephone since Trump and President Xi Jinping agreed to a ceasefire at the G20 summit in Tokyo.

"The Chinese have been a lot more cautious now than back in May when the trade talks broke down because they've experienced enough flip flops during the trade talks," said Tommy Wu, senior economist at Oxford Economics. "That's keeping the two sides more distant than last time around."

The role Huawei plays in any trade deal is a big question. The world's largest telecommunications equipment maker and leading smartphone brand has been on a US trade blacklist since May.

Trump said on the sidelines of the G20 last month that he would ease some restrictions on the company — a concession to Beijing, and potentially relief for some of its suppliers such as Google (GOOGL), Intel (INTC) and Qualcomm (QCOM).

But the Washington Post's report this week about the company's ties with North Korea could give ammunition to US officials who consider Huawei a threat to national security.

The newspaper said Huawei secretly helped build North Korea's cell phone network, potentially in violation of sanctions aimed at pressuring the regime to stop developing nuclear weapons. Huawei told CNN Business that it has "no business presence" in North Korea, and the company has denied that any of its products pose a national security risk. A spokeswoman declined further comment.

US Commerce Secretary Wilbur Ross told Bloomberg this week that he could not comment on a "pending investigation." But he did say "we are continuing to watch very carefully everything about Huawei, including the information revealed in that article."

Ross added in that interview that the Trump administration will review applications that would allow US companies to resume business with Huawei, with some decisions to come "within the next few weeks."

Because many US companies are pushing to restore ties, "it won't be seen as a defeat for Trump if he delivers easing on Huawei," said Edward Moya, senior market analyst at Oanda.

But Trump could face a backlash within his own administration.

"There are hawks within the administration, based on national security reasons, they at least want to keep Huawei" on the trade blacklist, Wu said.

The rare earths industry can weather any Chinese trade battle

Economic considerations remain a major factor, too. While both sides are politically motivated to secure an agreement, "someone has to look like a loser in this deal," said Moya.

"A lot of chips are on the US side in terms of where the economy is," he added.

America's economy is in a period of historic prosperity. The unemployment rate is near 49-year lows, the stock market has never been higher and consumers are spending. In China, meanwhile, economic growth has slumped to its lowest level in nearly three decades. The country is struggling to rein in high levels of debt and consumers are spending less freely than they were a year ago.

While there is no expectation that the next round of talks will yield a comprehensive deal, the two sides could make headway in some areas.

State-run media on Sunday reported that Chinese companies were asking US exporters about buying soybeans, cotton, pork, and sorghum, and had applied for the lifting of tariffs on those products.

Asked by reporters Tuesday about trade progress with China, Larry Kudlow, Trump's National Economic Council director, said the administration hopes "strongly" that China "will very soon start buying agriculture products."

"Going over there is a really good sign," he added.

US-China trade talks kick off in Shanghai with little fanfare

South China Morgen post reported that the latest round of US-China trade talks began in Shanghai on Tuesday morning in extremely low-key fashion, with both sides seeking to play down expectations of a quick end to the trade war.

It is the first time Shanghai has hosted talks during the trade war and the 12th round of negotiations overall.

Negotiators led by US trade representative Robert Lighthizer and US Treasury Secretary Steven Mnuchin on the American side and Vice-Premier Liu He on the Chinese side have previously shuttled between the respective capital cities of Washington and Beijing. The Shanghai talks will also be the first time China’s Commerce Minister Zhong Shan will play a direct role.

However, there were few signs of the talks on the ground in Shanghai. Local media carried little coverage on Tuesday, while there were no reports or pictures of the US delegation touching down in the city, despite this being the first face-to-face meeting between top trade envoys since talks dramatically collapsed in May.

The itinerary has also been kept under wraps. According to Bloomberg, the Chinese side will host a dinner at the Fairmont Peace Hotel, a landmark building in the historic Bund area by the Huangpu River, on Tuesday evening.

In the lobby of the Hyatt on the Bund hotel, where the US delegation is staying, there were no signs announcing the talks, but the security presence was heavy outside the hotel. A small group of photographers and journalists were staking out the hotel lobby throughout the day attempting to catch a glimpse of the negotiators.

The low key atmosphere could be a result of the Chinese government’s efforts to maintain tight control on all information related to the trade talks, as a way of keeping expectations in check.

Only Chinese state media outlets and a select few social media accounts have been permitted to report or even comment on the trade talks, which will attempt to build on the “ceasefire” agreed by President Xi Jinping and his US counterpart Donald Trump at their Osaka summit at the end of June.

A commentary published by the official Xinhua News Agency on Tuesday said that US trade delegates should learn from former US President Richard Nixon’s Shanghai visit in 1972 when Nixon signed the Shanghai Communique “in the sincere hope of normalising bilateral ties” with Beijing.

“Today once again in the metropolis of Shanghai, US negotiators need to demonstrate that same sincerity and, more importantly, reasonable expectations in the relaunched trade talks … to normalise bilateral trade relations,” read Xinhua’s English language commentary.

In another effort to hark back to the spirit of Nixon’s famous visit, some of the talks will take place at the Xijiao State Guest Hotel in the Changning district of Shanghai, where the former president stayed while finalising the wording of the communique.

The main conference hall at the hotel was being decorated with Chinese and American national flags and fitted with security checkpoints on Monday. A member of staff on-site told the South China Morning Post that a photo event has been scheduled for Wednesday.

China has been trying to narrow the scope of this week’s talks to focus on direct trade issues while putting long-term structural issues aside for a later date.

It is expected that Chinese imports of American farm products will be on the agenda, while Beijing will push for the US to remove tariffs and import embargoes on certain Chinese products and firms.

Arthur Kroeber, head of research at economic consulting firm Gavekal Dragonomics, argued in a note on Monday that the trade talks are waning in relevance.

“Whether or not the US and China strike a trade deal, and if so when is becoming a less interesting question,” Kroebe wrote. “If there is a deal, it will certainly not restore US-China trade and investment relations to their prior vibrancy. If there is no deal, it’s unlikely that will mean anything more than maintaining the existing high tariffs.”

“Either way, the global macro risk from the US-China trade conflict has ebbed almost to the vanishing point,” he said.