3 signs from APEC that the US and China are still far apart on trade

SUZHOU, China — Just over a week after the presidents of the United States and China met in Beijing, the world’s two largest economies are sending different messages about their priorities in Asia.

First, there’s the tariff.

China’s economy relies heavily on exports and free-flow trade, with China accounting for about 28% of goods produced worldwide, according to calculations by CNBC based on World Bank data.

Beijing’s statement on last week’s summit between Chinese President Xi Jinping and US President Donald Trump indicated that the tariff reductions would continue for a long time, but the US did not mention tariffs.

And on Saturday, Chinese Commerce Minister Wang Wentao told reporters that confirming the “vision” for the free trade agreement was a key outcome of the just concluded Asia-Pacific Economic Cooperation trade ministers’ meeting.

“Against the backdrop of increasing uncertainties and destabilizing factors in global and regional economic development, member countries redirected their attention to the FTAAP (Free Trade Area of ​​the Asia-Pacific), pledging to continue promoting economic integration through the FTAAP (Free Trade Area of ​​the Asia-Pacific) agenda,” Wang said in Chinese, according to the official English translation.

But when CNBC asked members of the U.S. delegation the day before about FTAAP and free trade, their responses focused on balanced trade, which is part of the Trump administration’s rationale for tariffs.

“FTAAP is really more of an agenda than a destination,” said Casey K. Mace, a senior U.S. official at the APEC forum. He noted that the United States is “aggressive” on elements of the FTAAP, such as competitiveness, labor standards, and trade facilitation.

China is the host country for this year’s APEC meeting, which is scheduled to culminate in a high-level meeting in Shenzhen in November. President Trump and President Xi are also scheduled to meet at the same time as the event.

The second point concerns the future of the United States and China.

There are still few details yet on how the two countries will move forward in achieving “constructive strategic stability” beyond China’s purchase of 200 Boeing jets and $17 billion in annual U.S. agricultural products through 2028.

According to a Chinese report released early Saturday morning, Wang met in Suzhou on Thursday with Rick Switzer, deputy U.S. trade representative and head of the U.S. delegation to the APEC trade ministers’ meeting.

The document says the two countries hope to reach agreement as soon as possible on the details of the economic outcomes of the meeting between President Trump and Mr. Xi, indicating that disagreements remain.

The U.S. Embassy in Beijing and the U.S. State Department did not respond to requests for comment.

Third, the technology competition between the United States and China is expanding into Asia.

Wang said the APEC trade ministers’ meeting reached a “new agreement” on digital trade cooperation.

When asked for further explanation, Lin Feng, Director-General of China’s Department of International Trade and Economic Relations, Ministry of Commerce, mentioned plans to make it easier for e-commerce companies to do business in the region, as well as “efforts to strengthen AI-related trade exchanges.”

Lin mentioned efforts to “shrink the digital divide” but did not specifically mention Chinese AI companies.

Although the United States restricts Chinese companies’ access to advanced semiconductors for training AI models, Chinese companies tend to release AI models that are cheap, if not free, to use and have features that increasingly separate them from their American rivals.

On the U.S. side, Mace emphasized plans to “continue to position American tech and digital companies as leaders in the region.”

Mace said the US tech company will hold a workshop at APEC’s “Digital Week” in Chengdu in July. Although China is the host of the event, “it is an opportunity to engage with all 21 (APEC) countries,” he added.

The United States is one of the 12 founding members of APEC, which was launched in Australia in 1989 as an informal forum for discussions on free trade and economic cooperation. The multilateral trade organization currently has 21 members, including mainland China, Hong Kong, and Chinese Taipei, which joined the forum in 1991.

Wang did not comment on “urgent official business” that prevented him from presiding over Friday’s opening session.