Senior Chinese and US officials met in Beijing yesterday for a second day of high-stakes talks aimed at forestalling the growing momentum toward a trade war that could trigger billions of dollars of tariffs.
The US and China are having “very good conversations,” US Secretary of the Treasury Steven Mnuchin said before leaving his hotel for the Diaoyutai State Guesthouse, where the talks are being held.
However, officials declined to give details of the discussions.
“I have to get on this elevator and not talk to reporters,” White House adviser and China hawk Peter Navarro said at his hotel.
During an event in Washington, US Vice President Mike Pence’s economic adviser Mark Calabria said the first day of talks had been “fairly positive,” Bloomberg News reported.
The US has given China a “detailed list of asks,” he said, adding that Washington wants Beijing to lower tariffs to match the US level.
Trump has made reciprocity a key demand in negotiations with China.
“The difficulty will always be that we will most of the time hear pretty positive things from China and the question is whether they will actually do them,” Calabria said.
Chinese Vice Premier Liu He (劉鶴), who is in charge of the economy, is leading the discussions for Beijing.
China’s state media showed little optimism that the trade talks would bring a breakthrough, suggesting that the best-case scenario would be a further deterioration in the situation.
“If the two sides do not strike a deal, and they merely agree to keep talking, we ought to consider that a positive outcome,” said an editorial in the state-run China Daily. “Let us hope that the US delegation has come with the willingness to talk sincerely rather than with the design to cause injury.”
The talks might receive some tailwinds from the latest trade data out of Washington, showing that the US global trade deficit narrowed in March.
The goods deficit with China fell 11.5 percent from February to US$25.8 billion, but analysts said that seasonal factors, such as China’s New Year holidays, were likely at play.
Bilateral trade in coming months could be hurt by US and Chinese buyers planning to avoid tariffs, with news this week that China might already be downsizing its soybean imports from the US.
“Whatever they’re buying is non-US,” said Soren Schroder, chief executive officer of agricultural giant Bunge Ltd.
“They’re buying beans in Canada, in Brazil, mostly Brazil, but very deliberately not buying anything from the US,” Bunge said in a Bloomberg News interview on Wednesday.
Soybeans were China’s largest import from the US last year, worth US$14 billion.
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