US National Economic Council Director Larry Kudlow
China is sending a trade envoy to Washington in a renewed effort to end a worsening tariff dispute that has raised worries it will chill global economic growth.
The delegation led by Vice Commerce Minister Wang Shouwen will visit in late August to discuss “issues of mutual concern,” the Commerce Ministry announced yesterday. It gave no details of a possible agenda.
The two governments are poised to impose a new round of tariff hikes on USD16 billion of each other’s goods next week in their worsening conflict over Beijing’s technology policy.
The Commerce Ministry said Beijing “reiterates its opposition to unilateralism and trade protectionism and does not accept any unilateral trade restrictions.”
This month’s meeting would be the first between senior U.S. and Chinese officials since June 3 talks in Beijing between Commerce Secretary Wilbur Ross and Vice Premier Liu He ended with no settlement.
Following that, Washington imposed its first round of 25 tariffs on $34 billion of Chinese goods on July 6 in response to complains Beijing steals or pressures foreign companies to hand over technology. China responded with similar penalties on American imports.
The Trump administration is due to impose similar increases on an additional USD16 billion of Chinese imports on Tuesday. China’s government has issued a list of American goods for retaliation.
Don’t underestimate donald Trump
Donald Trump’s top economic adviser welcomed China saying it will send Vice Commerce Minister Wang Shouwen to the U.S. for low-level talks in late August, while also adding that the president’s determination on trade shouldn’t be underestimated.
“It’s a good thing that they’re sending a delegation here – we haven’t had that in quite some time,” National Economic Council Director Larry Kudlow told CNBC yesterday.
“The Chinese government in its totality must not underestimate President Trump’s toughness and willingness to continue this battle to eliminate tariffs and non-tariff barriers and quotas to stop the theft of intellectual property and to stop the forced transfer of technology.”
China Vice Commerce Minister Wang Shouwen
He said the Chinese economy and currency “are slipping, as you all know, but let’s just see what happens.” Talks can produce better outcomes than expected, and talking is better than not talking, he added.
The Chinese delegation led by Wang will meet with an American group led by David Malpass, under secretary for international affairs at the Treasury Department, at the invitation of the U.S., China’s Ministry of Commerce said in a statement on its website.
“This will be ‘talks about trade talks,’” said Gai Xinzhe, an analyst at the Bank of China’s Institute of International Finance in Beijing. “Lower-level officials will meet and haggle and see if there is a possibility for higher-level talks.”
Before an earlier deal collapsed in May, China agreed to “significantly” increase purchases of U.S. goods and services, and that may provide a guide for the next round of discussions.
To restart trade negotiations with the U.S., China must offer a package of measures, according to Jacob Parker, the vice president for China operations for the U.S.-China Business Council in Beijing. China needs to make an offer that slashes the bilateral trade surplus, lowers import tariffs, provides better protection for intellectual property and stops forced technology transfers, Parker said earlier this month.
Caution is warranted, according to Gai. “Even if the senior officials reach a deal, things could still change, as President Trump can easily flip-flop. We have been there.”
China’s equity market has suffered declines and the yuan has been on a losing streak for more than a month. Chinese authorities, bracing for economic fallout, have introduced measures to support growth ranging from shifting toward a more accommodative monetary policy to boosting fiscal spending.
The two nations had appeared to have reached a deal in May after Chinese Vice Premier Liu He – President Xi Jinping’s top economic adviser – led a group of officials to Washington. But Trump backed away from the agreement soon afterward, and ever since the two sides have been locked in a trade standoff as they slapped tariffs on billions of dollars of each other’s goods.
The commerce ministry reiterated in the statement that China is against trade protectionism and won’t accept any unilateral trade restrictions. “China welcomes communications and dialogue on the basis of reciprocity, equality and integrity,” it said.
MDT/Agencies
No Comments