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Exclusive: U.S. waters down demand China ax subsidies in push for trade deal - sources

April 15, 2019 / Alexandra Alper

The world’s two biggest economies are nine months into a trade war that has cost billions of dollars, roiled financial markets and upended supply chains. U.S. President Donald Trump’s administration has slapped tariffs on $250 billion worth of imports of Chinese goods to press demands for an end to policies - including industrial subsidies - that Washington says hurt U.S. companies competing with Chinese firms. China responded with its own tit-for-tat tariffs on U.S. goods. The issue of industrial subsidies is thorny because they are intertwined with the Chinese government’s industrial policy. Beijing grants subsidies and tax breaks to state-owned firms and to sectors seen as strategic for long-term development. Chinese President Xi Jinping has strengthened the state’s role in parts of the economy.