China and the United States will hold lower-level trade talks this month, offering hope that they might resolve an escalating tariff war that threatens to engulf all trade between the world's two largest economies.
Still, White House Economic adviser Larry Kudlow warned Beijing not to underestimate President Donald Trump's resolve in pushing for changes in China's economic policies.
A Chinese delegation led by the vice-minister of commerce, Wang Shouwen, will meet US representatives led by the treasury undersecretary for international affairs, David Malpass, China's Ministry of Commerce said in a statement on its website.
The Wall Street Journal reported that the talks in Washington would take place next Tuesday or Wednesday, just before $16 billion (€14 billion) in new US tariffs on Chinese goods take effect, along with an equal amount of retaliatory tariffs from Beijing.
While the engagement was seen by analysts and business officials as positive, they cautioned that the talks were unlikely to lead to a breakthrough, given they involve lower-level officials, led on the US side by the Treasury Department, not the US Trade Representative (USTR).
There also remains a wide gap between the two sides over Washington’s demands that Beijing improve market access and intellectual property protections for US companies, cut industrial subsidies and slash a $375 billion trade deficit with China.
Kudlow, who heads the White House Economic Council, declined to comment on the specific goals of the Malpass-Wang talks.
“It is a good thing if they’re sending a delegation here. We haven’t had that in quite some time,” Kudlow told CNBC television.
“The Chinese government in its totality must not underestimate President [Donald] 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,” Kudlow added.
In a White House cabinet meeting, Kudlow said the decline of the yuan currency in recent months showed that the United States had an upper hand in the trade war.
At the same meeting president Trump said: “We’re talking to China, they very much want to talk. They just are not able to give us an agreement that is acceptable, so we’re not going to do any deal until we get one that’s fair to our country.”
The world’s two largest economies have been locked in escalating rounds of tit-for-tat tariffs, with $34 billion in goods targeted by each country and another $16 billion slated to go into effect on August 23rd. Trump has threatened to impose duties on virtually all of the more than $500 billion of Chinese goods exported to the US.
The meeting would end a drought in talks since early June, when US commerce secretary Wilbur Ross met Chinese vice-premier Liu He in Beijing, but returned with no agreements. – Reuters/Bloomberg