US, China working on fresh round of trade talks

A textile factory in Shangqiu, in China's central Henan province. So far, the US and China have imposed tariffs on US$50 billion (S$68.6 billion) worth of each other's goods.
A textile factory in Shangqiu, in China's central Henan province. So far, the US and China have imposed tariffs on US$50 billion (S$68.6 billion) worth of each other's goods. PHOTO: AGENCE FRANCE-PRESSE

WASHINGTON/BEIJING • The US and Chinese governments are working out the details for a new round of trade talks, raising hopes that the world's top two economies could step back from the brink of an all-out trade war.

Chinese Foreign Ministry spokesman Geng Shuang told reporters that China welcomed the US invitation to hold trade talks, and that the two sides were discussing the details.

"China has always held that an escalation of the trade conflict is not in anyone's interests. In fact, from last month's preliminary talks in Washington, the two sides' trade talk teams have maintained various forms of contact and held discussions on the concerns of each side," he said yesterday.

That invite, first reported by The Wall Street Journal, was recently extended by senior US officials led by Treasury Secretary Steven Mnuchin, according to three people familiar with the matter who spoke on condition of anonymity.

One of the people said the talks, if agreed to by the Chinese, are likely to take place in Washington.

"We are in communication right now, and you could say that communication has picked up a notch," said Mr Larry Kudlow, director of US President Donald Trump's National Economic Council, who confirmed the report. "It is a positive thing."

The news gave a lift to Asian stocks, including Chinese shares, and the yuan currency. The Dow Jones Industrial Average turned positive, and emerging market assets rallied on the news.

Two people familiar with the effort said Mr Mnuchin's invitation was sent to his Chinese counterparts, including Vice-Premier Liu He, the top economic adviser to Chinese President Xi Jinping, for talks in coming weeks.

 
 
 
 

A meeting among Cabinet-level officials could ease market worries over the escalating tariff war that threatens to engulf all trade between the two economies and raise costs for firms and consumers.

"I think most of us think it is better to talk than not to talk, and I think the Chinese government is willing to talk," Mr Kudlow earlier told reporters outside the White House.

But he was non-committal over the chances of a breakthrough. "I guarantee nothing," he said.

Officials from both countries have met four times for formal talks, most recently last month, when Mr David Malpass, Treasury Undersecretary for International Affairs, led discussions in Washing-ton with Chinese Vice-Minister for Commerce Wang Shouwen.

So far, the US and China have hit US$50 billion (S$68.6 billion) worth of each other's goods with tariffs in a dispute over US demands that China make sweeping economic policy changes, including ending joint venture and technology transfer policies, rolling back industrial subsidy schemes and better protection for US intellectual property.

The Trump administration is preparing to activate tariffs on US$200 billion worth of Chinese goods.

Mr Trump said last week that he also had tariffs on an additional US$267 billion worth of goods ready "on short notice if I want". China has threatened retaliation, which could include action against US companies operating there.

US business lobbies AmCham China and AmCham Shanghai yesterday published a joint survey showing that the negative impact on US companies in China of tit-for-tat tariffs Washington and Beijing have imposed on each other was "clear and far reaching".

The European Union Chamber of Commerce in China released its own survey yesterday, saying the tariffs were causing "significant disruptions" to global supply chains and "seriously impacting" non-Chinese and non-US firms.

BLOOMBERG, REUTERS

A version of this article appeared in the print edition of The Straits Times on September 14, 2018, with the headline 'US, China working on fresh round of trade talks'. Print Edition | Subscribe