Traders work on the floor of the New York Stock Exchange, (NYSE) in New York, U.S., April 5, 2018. REUTERS/Brendan McDermid
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In a round of interviews and media briefings Wednesday, Trump administration officials downplayed the risk of a trade war with China, insisting tariff threats are just the first round in negotiations. The concerted attempt to calm market nerves came after the two countries each published a list of potential targets for higher tariffs in a dispute over intellectual property and technology transfer.NEGOTIATING STRATEGYThe threat to impose additional 25 percent tariffs on imports from China worth up to $50 billion fits with the Trump administration's typical negotiating pattern.There is no guarantee the negotiations will reach a successful conclusion and avoid imposition of the threatened tariffs.For its hard-line negotiating strategy to work, the administration must convince China and other countries the threat to impose tariffs is very real.So, the U.S. will have to narrow its demands to a list of specific and realistic steps that China will be able to take.Even before the tariffs were announced, China and the U.S. had been trying to negotiate a deal over technology transfer, intellectual property and other issues.The negotiating process could easily drag on for six months or more, creating significant uncertainty for business in the meantime and complicating investment decisions.
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