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U.S. trade delegation comes back from China empty-handed

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WASHINGTON (Circa)-- An American trade delegation quietly left China on Friday without having secured any new agreements to address the Trump administration's concern over the massive trade deficit which exists between the U.S. and China.

Led by Secretary of the Treasury Steve Mnuchin and U.S. trade representative Robert Lighthizer, the delegation engaged in a series of high-level talks with China over two days. The U.S. team laid out two major demands: the first was to find a way to cut the massive $375 billion trade deficit by $200 billion over two years, and the second was to get Beijing to stop subsidizing advanced manufacturing.

"We are bringing fairness and reciprocity to our economic relationship with China, and protecting our intellectual property from them, as well," said Secretary of State Mike Pompeo during a press conference on Wednesday.

Chinese officials did not agree to the tough U.S. demands, but they did bring up some issues of their own, according to the New York Times. They were upset with the U.S. decision to impose penalties on ZTE, a large Chinese telecommunications company, for its repeated violations of sanctions against Iran. In addition to a $1.19 billion dollar fine, the Commerce Department has banned U.S. shipments of advanced computer chips and other important equipment to ZTE, some of which is necessary for the manufacture of the company's products.

China was also upset with U.S. restrictions on the export of advanced items that have a dual civilian and military use, also known as "dual-use technologies." U.S. Export Administration Regulations seek to limit the trade of these items, including high-tech hardware and software programs. Anything that would "make a direct and significant contribution" to Chinese military capabilities is denied a license for export, according to the U.S. Department of Commerce.

Despite the disputes, and the lack of any concrete agreement, Chinese officials portrayed the talks in a positive light.

"The two sides agreed that a sound and stable China-U.S. relationship is crucial for both, and they are committed to resolving relevant economic and trade issues through dialogue and consultation," said the officials, according to the Times.

Mnuchin came into the negotiations knowing there would be no quick fix.

"These are trade disputes," Mnuchin told CNN on Tuesday. "They are not easy, and any negotiation isn't easy."

But there are concerns that these trade disputes are evolving into a trade war. The Trump administration's tariffs on steel and aluminum, widely seen as an attempt to curb China's dumping of cheap steel on the market, sent stock prices plummeting on Wall Street. China has announced a massive list of U.S. goods it plans to tariff in response, many of which are agricultural products. That could be a problem for Trump, who won several states in the 2016 election which have a strong agricultural base.

"If China unfairly targets our agricultural community, or other areas, we will defend our interests," said Mnuchin.

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