WASHINGTON: The United States and China traded conciliatory gestures, raising hopes they can deescalate a standoff over trade that has shaken financial markets and cast gloom over the global economy.
In Beijing, China’s Commerce Ministry said Thursday that Chinese importers are asking US suppliers for prices of soybeans, pork and other farm goods. It’s a sign they might step up purchases of American agricultural products, a possible goodwill gesture ahead of talks next month aimed at ending the tariff war.
The statement from China followed President Donald Trump’s decision Wednesday to postpone a planned tariff hike on Chinese imports by two weeks. US Treasury Secretary Steven Mnuchin told reporters Thursday that China asked that the tariff increase be rescheduled from October 1, the 70th anniversary of the founding of the People’s Republic of China. Trump delayed the tariff hike to October 15 in what Mnuchin called a “goodwill gesture to the Chinese.”
The Treasury secretary said mid-level US and Chinese negotiators will meet next week or the week after. Then a high-level Chinese delegation is likely to travel to Washington to meet with Mnuchin and US Trade Representative Robert Lighthizer. “My expectation is they’ll be here in October unless something changes,” Mnuchin said.
The gestures Wednesday and Thursday appear meant to reduce tension ahead of the talks. US stocks, highly sensitive to the ups and downs of the negotiations, rose in early trading before giving up most of the gains by late morning.
“These actions seem designed to get the China trade talks back on track,” said Amanda DeBusk, a partner at the law firm Dechert LLP.
By delaying his tariff hike, Trump allowed for the possibility they might make enough progress to avert the increase indefinitely. However, economists say a final agreement is unlikely this year.
The US-China talks have basically gone nowhere for four months.
The world’s two biggest economies are fighting over Beijing’s ambitions to make China a world leader in advanced technologies such as artificial intelligence and robotics. The United States, Europe, Japan and other trading partners charge that Beijing has resorted to predatory tactics as part of the campaign, including stealing trade secrets and forcing foreign firms to hand over technology to gain access to the Chinese market.
The US and China have slapped import taxes on hundreds of billions of dollars’ worth of each other’s products in a tariff war that has weighed on global trade and economic growth and created uncertainty for businesses deciding where to situate factories, find suppliers and sell their products.
The two countries appeared to be nearing a deal in early May. But relations deteriorated and talks stalled after the US accused China of reneging on earlier commitments.
“There have been so many ups and downs in the talks that it is hard to predict whether the new conciliatory actions will lead to a deal,” said DeBusk, a former Commerce Department trade official. “The economic situation may create additional impetus for a deal. On the other hand, the Chinese have a long-term horizon, and they may be reluctant to take a deal that could give Trump a victory for his re-election campaign. ”
Earlier Wednesday, Beijing announced exemptions for 16 categories of American products from punitive duties. But it kept in place penalties on soybeans, the biggest US export to China, and other farm goods. Those target farm states that supported Trump in the 2016 presidential election.
The Chinese exemptions apply to raw materials needed by farmers and factories. A commerce ministry spokesman said they were granted if no alternative suppliers could be found or the increase would hurt Chinese industry or the economy.
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Written by Nishant Pokhrel
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