US President Donald Trump said on Thursday that he will meet Chinese Vice-Premier Liu He on Friday, the second of two days of high-level US China trade talks aimed at averting further tariff increases, and that negotiations are “going very well” so far.
This week’s meetings convened amid a spike in friction between the two countries on many fronts and indications of a trade war-related slowdown in global economic growth, which is hitting China particularly hard.
US Treasury Secretary Steven Mnuchin and US Trade Representative Robert Lighthizer had a full day of meetings with a delegation led by Liu, resuming negotiations at the highest level since the two US officials met Liu in Shanghai in July.
Big day of negotiations with China. They want to make a deal, but do I? I meet with the Vice Premier tomorrow at The White House.
— Donald J. Trump (@realDonaldTrump) October 10, 2019
“We just completed a negotiation with China,” Trump told White House reporters after the first day of talks ended.
“We’re doing very well. We’re having another one tomorrow. I’m meeting with the vice-premier over at the White House, and I think it’s going really well. We had a very, very good negotiation with China. They’ll be speaking a little bit later, but they’re basically wrapping it up and we’re going to see them tomorrow right here.”
After escalating tariffs on each other’s imports throughout the trade war that started in July last year, the two sides are aiming to avert USTR’s plan to impose an additional 5 per cent duty on US$250 billion worth of Chinese goods on October 15, raising the levy to 30 per cent.
The talks in Washington also follow the US Commerce Department’s blacklisting of 28 Chinese entities and firms allegedly linked to abuses in Xinjiang. The US State Department also imposed visa restrictions on Chinese government officials suspected of repressing Uygurs and other members of ethnic minority groups in their country.
China’s state news agency Xinhua on Thursday quoted Liu as saying that China was willing to reach agreement with the US on matters of importance to both sides, to avoid further tariff escalations.
“On the basis of equality and mutual respect, China is willing to reach consensus with the US through this round of consultations on issues of mutual concern to prevent further escalation and spread of friction,” he said.
Liu made the comments in Washington after meeting US-China Business Council president Craig Allen, IMF managing director Kristalina Georgieva and US Chamber of Commerce executive vice-president Myron Brilliant, the report said, adding that the trade war was “having a serious impact on the world economy”.
The chamber held a press briefing on Thursday, citing meetings it held with Liu and Trump administration officials this week.
While the chamber’s officials said a significant breakthrough in the talks this week was unlikely, they held out hope for agreements on modest Chinese purchases of US soy and other farm products, Chinese intellectual property protection and market access, an agreement on currency exchange rates, and a freezing or possibly a rolling back of US tariffs.
In addition to tariffs on US$250 billion of Chinese goods that are set to increase to 30 per cent on Tuesday, fresh duties of 15 per cent on US$160 billion of largely consumer products will go into effect the same day.
“I’m not here to suggest we’re going to have a grand slam in Washington this week,” Brilliant said at the press briefing. “First, we need confidence on both sides. That’s what this week is about.”
The details of a currency agreement were still being worked out and the timing of Monday’s blacklisting of and sanctions on 28 Chinese companies was “unfortunate”, he said.
Any clarification of how Chinese telecom giant Huawei Technologies might operate in the US market could provide clarity for US companies and possibly help build confidence between Beijing and Washington, he said.
Brilliant said also that ideally, progress this week could pave the way for a meeting between Chinese President Xi Jinping and US President Donald Trump at the Asia-Pacific Economic Cooperation summit in Chile next month, leading to a more comprehensive deal.
Underscoring Beijing’s concern about the economic pain caused by the trade war, the World Bank on Thursday cut China’s 2019 economic growth forecast to 6.1 per cent, from its 6 per cent estimate in April, owing to factors including “less benign external conditions”.
The revised forecast is just above the bottom end of Beijing’s growth target range of 6 to 6.5 per cent growth this year.
Meanwhile, the Institute of International Finance in Washington projected a global growth slowdown to 2.6 per cent this year from 3.2 per cent in 2018, its lowest since 2012, adding that the weaker growth was “particularly pronounced in Latin America, China, India and Africa/Middle East”.
About 3 per cent of China’s GDP is consumed in the US, versus about 0.7 per cent of US GDP consumed in China, Erik Lundh, a senior economist for US and China at the Conference Board, said at an event the member-based think tank held in New York on Thursday.
“There is a pretty big asymmetry in terms of the economic exposures through that lens,” Lundh said.
Additional reporting by Jeong-ho Lee
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