US trade negotiators heading to China

First face-to-face talks since May will also involve Chinese commerce chief, a hardliner

Chinese Vice-Premier Liu He conversing with US Treasury Secretary Steven Mnuchin, with Trade Representative Robert Lighthizer looking on, after trade talks in Washington broke down in May.
Chinese Vice-Premier Liu He conversing with US Treasury Secretary Steven Mnuchin, with Trade Representative Robert Lighthizer looking on, after trade talks in Washington broke down in May.PHOTO: REUTERS

WASHINGTON • US negotiators will visit China early next week for trade talks, Treasury Secretary Steven Mnuchin told CNBC in an interview yesterday.

Mr Mnuchin said he and US Trade Representative Robert Lighthizer will leave for China on Monday and hold talks with their Chinese counterparts on Tuesday and Wednesday in Shanghai, followed by more talks in Washington later.

The meeting will be the first high-level, face-to-face trade negotiations between the world's two biggest economies since talks broke down in May. It will involve a broad discussion of the issues outstanding and is not expected to yield big breakthroughs, a senior administration official said.

US President Donald Trump and his Chinese counterpart Xi Jinping met at the Group of 20 summit in Japan last month and declared a tentative truce in their year-long trade war. The leaders directed their negotiators to resume trade talks. Since then, Mr Mnuchin, Mr Lighthizer and their Chinese counterparts have spoken by phone.

US officials have played down the likelihood of a quick deal with China. "It is impossible to judge how long it will take when the President's objective is to get a proper deal or go ahead with tariffs," Secretary of Commerce Wilbur Ross told Bloomberg TV on Tuesday.

"It is not important whether it be done a week from Tuesday or a month or two months."

The two sides remain at odds over significant issues, including Washington's demands for structural reforms to China's economy and Beijing's call for the US to remove existing punitive tariffs on imported Chinese goods.

 
 
 

Recent talks have focused on Huawei licences and agriculture purchases, and lacked engagement on structural issues that the US wants addressed in any trade deal.

People familiar with next week's meeting say it is a positive step for talks overall but caution that it is likely to feature a wide-ranging discussion of where things stand, rather than a chance for substantive negotiations. It is still unclear what the starting point will be for deeper discussions. Talks collapsed in May because the two countries disagreed on draft terms of a deal. The meeting will be the first time that China's Commerce Minister Zhong Shan joins the core group of negotiators, which on the Chinese side has been led by Vice-Premier Liu He. Mr Zhong is seen as more of a hardliner than Mr Liu and some China watchers say he was added to the talks to ensure a more hawkish view is represented at the table.

Mr Zhong is a known quantity for many US officials, including Mr Lighthizer who has met him several times over the past two years at meetings such as Asia-Pacific Economic Cooperation summits.

On Monday, Mr Trump and senior White House officials, including Mr Mnuchin and Mr Lighthizer, met chief executives of US technology firms in a step towards easing a ban on sales to China's Huawei Technologies, another point of tension in the relationship.

National Economic Council director Larry Kudlow said the meeting was positive and cited it as one reason he is optimistic that in-person talks with China were likely to resume soon.

BLOOMBERG, REUTERS

 
A version of this article appeared in the print edition of The Straits Times on July 25, 2019, with the headline 'US trade negotiators heading to China'. Subscribe