China and the US announced that face-to-face negotiations aimed at ending their tariff dispute are to be held in Washington next month.
Chinese Vice Premier Liu He (劉鶴) agreed to a visit “in early October” during a telephone call in Beijing yesterday with US Secretary of the Treasury Steven Mnuchin and US Trade Representative Robert Lighthizer, the Chinese Ministry of Commerce said in a statement.
A statement from the US Department of the Treasury’s office confirmed that ministerial-level discussions would take place in “the coming weeks,” without specifying when.
Any meeting in the immediate future would take place with US President Donald Trump’s administration set to ratchet up levies on Oct. 1 and in December.
The Chinese ministry said that lower-level officials would have “serious” discussions this month to prepare for the talks.
The Treasury Department said in its statement that deputies would seek “to lay the groundwork for meaningful progress.”
Both sides on Sunday raised tariffs, while the US plans to add more tariffs on Oct. 1, and then both nations are to increase them again on Dec. 15 unless there is a breakthrough.
Asian stocks and US equity futures climbed after the news, while the yuan advanced and the US dollar stabilized after dropping the most since June.
“The bigger impact is on China in our estimates at this point,” IMF chief economist Gita Gopinath told Bloomberg Television, referring to the tariffs. “If these tensions continue and global growth were to, say, slow even at a faster pace than we think, then that could change financial market sentiment, that could change business confidence and that can slow down the global economy.”
The IMF estimates that the current and upcoming tariffs will shave about 0.8 percent off global GDP growth next year, Gopinath said, with the fund forecasting a 3.5 percent expansion next year.
Some within the Trump administration are skeptical that China is willing to make the sort of broad commitment to reforms sought by the US that caused a breakdown in talks in May, people familiar with the matter said.
Others have become increasingly focused on trying to calm financial markets and forestall economic fallout in the US. It is unclear whether the two sides would go back to a May draft agreement as the US has been seeking.
“No one is holding their breath” with regard to the talks, said Chua Hak Bin (蔡學敏), an economist at Maybank Kim Eng Research Pte in Singapore. “Investors are slowly coming to terms that a trade deal is increasingly remote, with both sides talking tough and preparing for a long battle.”
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