Trade is always a contentious issue between the world's two largest economies, the US and China.
(Bloomberg) --
The U.S. and China are trying to restart talks aimed at averting a full-blown trade war between the world’s two largest economies, two people familiar with the effort said.
Representatives of U.S. Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He are having private conversations as they look for ways to reengage in negotiations, according to the people who spoke about the deliberations on condition of anonymity.
They cautioned that a specific timetable, the issues to be discussed and the format for talks aren’t finalized, but added there was agreement among the principals that more talks need to take place.
Negotiations to resolve the dispute have been stalled for weeks, with both sides refusing to budge. High-level U.S. talks on the Trump administration’s trade posture with China are taking place this week, according to a third person who also spoke on the condition of anonymity.
U.S. stocks rose, Treasury yields edged higher, offshore yuan erased an earlier drop and the dollar pared gains.
The next wave of U.S. tariffs is set to kick in as early as Wednesday, with the possible imposition of duties on another $16 billion of Chinese imports. Officials in Beijing have vowed to respond with the same amount of tariffs on U.S. products.
Complicating Mnuchin’s efforts is a harder line taken by U.S. Trade Representative Robert Lighthizer, who has jurisdiction over the U.S.’s 301 investigation that sparked the tariffs. That case concluded China was stealing American technology and tariffs were needed to offset the damage.
A U.S. Treasury official didn’t immediately respond to a request for comment.
‘Chronic Problem’
U.S. and Chinese officials have given little recent indication in public that a restart to negotiations might be in the offing. Lighthizer said last week that trade tensions with China are a “chronic problem,” while China’s representative at the World Trade Organization accused the U.S. of “extortion.”
The two sides held three rounds of formal talks, beginning with a delegation to Beijing led by Mnuchin in May. After Liu visited Washington later that month, the nations released a joint statement pledging to reduce the U.S. trade deficit with China, among other things. But within days, President Donald Trump himself backed away from the deal, saying talks would “probably have to use a different structure.”
Talks broke off after the Trump administration imposed tariffs on $34 billion in Chinese imports this month, a move the Chinese said would void any promises they’d made in negotiations. Beijing responded in kind with its own tariffs.
Trump’s mission to reduce the U.S. trade deficit via the threat of tariffs has brought him into conflict with China as well as U.S. allies, roiling financial markets and raising fears of a global trade war the International Monetary Fund has warned may undermine the strongest economic upswing in years.