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The United States and China sought to ease trade war tensions on Monday, with Beijing calling for calm and US president Donald Trump predicting a deal after markets fell in response to new tariffs from both countries.
Mr Trump, speaking on the sidelines of the G7 summit of world leaders in France, said Chinese officials had contacted US trade counterparts overnight and offered to return to the negotiating table.
Vice Premier Liu He, who has been leading the talks with Washington, said on Monday China was willing to resolve the trade dispute through “calm” negotiations and resolutely opposed the escalation of the conflict.
Mr Trump welcomed that language and, days after referring to president Xi Jinping as an enemy, heaped praise on his Chinese counterpart.
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“They want calm, and that’s a great thing, frankly. And one of the reasons that he’s a great leader, president Xi, and one of the reasons that China’s a great country is they understand how life works,” Mr Trump said.
“China called last night our top trade people and said ‘Let’s get back to the table’, so we’ll be getting back to the table, and I think they want to do something,” he said.
In Beijing, foreign ministry spokesman Geng Shuang said he had not heard that a phone call between the two sides had taken place.
However, China’s commerce ministry typically releases statements on trade calls, not the foreign ministry. The commerce ministry did not immediately respond to a request for comment.
The increasingly bitter trade war between the world’s two largest economies escalated on Friday, with both sides levelling more tariffs on each other’s exports.
Mr Trump announced an additional duty on some $550 billion of targeted Chinese goods, hours after China unveiled retaliatory tariffs on $75 billion worth of US goods.
Raising tariffs
On Sunday, the white house said Mr Trump regretted not raising the tariffs even more. But the president also appeared to back off of his threat to order US companies out of China.
Mr Liu, speaking at a tech conference in southwest China's Chongqing, said nobody benefited from a trade war.
“We are willing to resolve the issue through consultations and cooperation in a calm attitude and resolutely oppose the escalation of the trade war,” Mr Liu, who is Mr Xi’s top economic adviser, said, according to a government transcript.
“We believe that the escalation of the trade war is not beneficial for China, the United States, nor to the interests of the people of the world,” he said.
The trade war has damaged global growth and raised market fears that the world economy will tip into recession.
Mr Geng, the Chinese Foreign Ministry spokesman, added that China would retaliate if Mr Trump followed through and enforced the latest US tariffs.
Before Mr Trump spoke on Monday, global stock markets reeled, while China’s yuan currency fell to an 11-year low. Investors streamed into the safe harbours of sovereign bonds and gold.
The US president, who at times predicts a deal will happen and at other times says he is happy with the tariff situation, said talks would start again soon and a deal would come.
“I think we are going to have a deal,” he said.
The two sides had been slated to meet in September in Washington, but it was unclear last week whether the new tariff tit-for-tat would alter those plans.
Multiple sins
The United States accuses China of multiple economic sins, including intellectual property theft, currency manipulation, and forced technology transfer by US companies to their Chinese partners as a requirement for doing business in China. China denies the US allegations.
Beijing and Washington were close to a deal last spring but US officials said China backed away from an agreed text over a reluctance to change laws to address US complaints.
The trade war has affected businesses all over the world and disrupted supply chains. Mr Trump recently urged US companies to move their operations out of China, but it was not clear how or whether his efforts to order such a move would work. – Reuters
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