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Trump talks trade

After a brief truce with China to co-operate on North Korea, President Donald Trump visits Beijing this week amid mounting U.S. trade complaints, with limited prospects for progress on market access, technology policy and other sore points.

The strains between the world's two biggest economies are fueling anxiety among global companies and advocates of free trade that they could retreat into protectionism, dragging down growth.

Washington accuses Beijing of backsliding on market-opening promises, and Trump said last week that the U.S. trade deficit with China — $347 billion last year — is "so bad that it's embarrassing."

"I don't want to embarrass anybody four days before I land in China, but it's horrible," said Trump.

His government has raised import duties on Chinese aluminum foil, stainless steel and plywood, and is investigating whether Beijing improperly pressures foreign companies to hand over technology.

If they discuss trade during the two-day visit, Chinese President Xi Jinping's government is unlikely to offer enough "to appease U.S. negotiators," said John Davies of BMI Research.

That is likely to lead to "more protectionist measures on the part of the U.S.," said Davies.

While Trump is looking to boost sagging public approval ratings, the Chinese leader enters their meeting on a political high.

The ruling Communist Party added Xi's name to its constitution at a twice-a-decade congress last month, giving him status equal to Mao Zedong, founder of the communist government, and Deng Xiaoping, who launched economic reforms in 1979.

At the congress, Xi promised to open the economy wider but affirmed plans to build up state-owned companies that dominate industries including finance, energy and telecoms. That, along with plans for government-led development of electric cars and other technology, makes foreign companies worry that Beijing is squeezing them out of promising fields.

The chairman of the American Chamber of Commerce in China, William Zarit, expressed concern that Trump appears to have done too little to prepare and said some companies worry his focus on trade in goods will mean he does too little about such "structural issues." Zarit said those include limits on access to finance, health care and other industries.



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