US to discuss trade disputes with China economic official Liu He next week

Senior Chinese economic adviser Liu He attending the World Economic Forum annual meeting in Davos, Switzerland, on Jan 24, 2018.
Senior Chinese economic adviser Liu He attending the World Economic Forum annual meeting in Davos, Switzerland, on Jan 24, 2018.PHOTO: REUTERS

WASHINGTON (REUTERS) - Senior US officials will discuss trade disputes next week with a top Chinese economic official when he visits Washington, a senior US official said on Friday (Feb 23) as President Donald Trump considers new tariffs on steel imports.

The talks will be led by Trump's trade envoy, Robert Lighthizer, who will meet with senior Chinese economic adviser Liu He, the official said.

US officials say they do not expect a major breakthrough in the discussions.

Trump has long sought a way to a more balanced trade relationship with China and threatened to impose a big "fine"against China to protect American intellectual property. The US official said Trump had been discussing imposing a global tariff on imports of steel from China and other countries.

A source close to the White House said he had expressed interest in imposing a tariff on steel imports of at least 24 per cent, but a White House spokesman said no final decision had been made.

The prospect of a global tariff sent steel shares rising after hours with United States Steel Corp and AK Steel Holding Corp up more than 3 per cent.

The Commerce Department on Feb 16 recommended that Trump impose stiff curbs on steel imports from China and other countries and offered the president several options, ranging from global and country-specific tariffs to broad import quotas.

A blanket tariff on steel would cover every steel and aluminum product entering the American market from China, the world's largest steel producer.

"No final decisions have been made. As with every decision he makes, the security of the American people and the American economy will be the president's primary concerns while he considers his potential options," White House spokesman Raj Shah said.

"President Trump is committed to achieving fair and reciprocal trade relationships that protect the American worker and grow our economy," he said.

Liu, a Harvard-trained economist and trusted confidant of Chinese President Xi Jinping, has emerged as the front-runner to be the next governor of China's central bank, according to sources with knowledge of the situation. Liu is the top adviser to Xi on economic policy and is also expected to become vice premier overseeing the Chinese economy.

China has expressed concerns over excessive protectionism in the US steel sector and urged restraint. It has also said it will oppose any "unfair and unreasonable" trade measures by countries such as the United States.

American steel companies have pressed the administration to impose trade measures to curb excess steel capacity and surging imports they say are undermining the US industry.

Exports from China to the United States reached 1.18 million tonnes last year. China produces a total of 800 million tonnes of steel each year, equal to about half of global output.

In a meeting with a bipartisan group of US senators and representatives at the White House earlier this month, Trump signaled he would take at least some action to restrict imports of both steel and aluminum.