Chinese Premier Li Keqiang says China and US should stick to negotiations to address trade disputes

Alarm is growing over a possible trade war between the world's two largest economies.
Alarm is growing over a possible trade war between the world's two largest economies.PHOTO: REUTERS

BEIJING (AFP, REUTERS) - China and the United States should stick to negotiations to address disputes and trade friction, Premier 
Li Keqiang said Monday (March 26) at a forum, state media reported. 

China will further open its door wider and will treat domestic and foreign firms equally, Li said at the closed-door session in Beijing.

The two countries have traded threats and heated rhetoric in recent days, ratcheting up fears that the world’s two biggest economies are heading towards a damaging trade war.

Li's comments were reported as China's foreign ministry lashed out at US “economic intimidation” following President Donald Trump’s announcement of new import tariffs, but said it was open to negotiations to resolve trade frictions.

Trump said last Thursday that the United States would impose new tariffs on some $60 billion of Chinese imports over the “theft” of intellectual property, rattling global financial markets.

Vice President Mike Pence boasted that the measures mean that the “era of economic surrender is over”.

Asked about the remarks, Chinese foreign ministry spokeswoman Hua Chunying told a press briefing on Monday that “it would have been more appropriate to say that it’s time to stop the US’s economic intimidation and hegemony”.

Beijing has not stood idle.

On Friday, it unveiled a list of $3 billion worth of US goods, including pork, fruits and wine, that could be targeted with tariffs in retaliation for steel and aluminium tariffs – if negotiations fail.

“We also have the confidence and the capacity to safeguard our legitimate and legal interests, whatever the circumstances,” Hua said.

“Now the ball is in the US court.”

Trade negotiations

While the two sides have traded barbs in public, US and Chinese officials have begun behind-the-scenes negotiations to improve American access to the Asian country’s huge market, according to the Wall Street Journal.

“We keep saying that the Chinese side is willing to negotiate with the US to properly manage divergences, on the basis of mutual respect and equal mutual benefits,” Hua said when asked about the report. “Our door is always wide open to dialogue and consultation.”

The Wall Street Journal said the discussions – led by China’s economic “czar” Liu He, US Treasury Secretary Steve Mnuchin and US trade representative Robert Lighthizer – cover topics including manufacturing and financial services, citing anonymous sources close to the issue. 

Mnuchin and Lighthizer sent Liu a letter last week spelling out requests including greater US access to China’s financial sector, the reduction of Chinese tariffs on US vehicles and for China to increase its US semiconductor purchases. 

China has offered to buy more semiconductors from the US by diverting some purchases from South Korea and Taiwan, to help cut China’s trade surplus with the US, the Financial Times reported on Monday, citing unidentified sources. 

To avert a looming trade war with the U.S., Chinese officials are also rushing to finalise new regulations by May that will allow foreign financial groups to take majority stakes in its securities firms, Financial Times said, citing people briefed on the discussions.

Speaking on Fox News Sunday, the US treasury secretary said “we’re working on a pathway to see if we can reach an agreement as to what fair trade is for them.”

“I am cautiously hopeful we reach an agreement, but if not we are proceeding with these tariffs.”

China’s official Xinhua news agency said at the weekend that Liu, a Xi aide who was promoted to the post of vice premier earlier this month, told Mnuchin on Saturday that Beijing was “ready to defend its national interests”, but both “agreed to continue to communicate”. 

China is not the only country facing Trump’s ire over trade.  Trump on Thursday authorised the suspension of the controversial tariffs on steel and aluminium imports from key trade partners including the European Union, Argentina, Australia, Brazil, Canada, Mexico and South Korea – but only until May 1. 

Seoul, a major US ally in Asia, said on Monday that it has agreed to concessions with the United States to escape the steel duties and to secure a revised trade deal that Trump has repeatedly threatened to tear up.