Tuesday’s long-awaited meeting between top economic officials from China and the United States appeared to be a step toward a widely anticipated rollback of punitive tariffs on some Chinese products, four years after being put into place.
However, some analysts surmise that any such move by Washington would be aimed squarely at tackling decades-high inflation in the US, and that changes to the Trump-era tariffs would not alter the course of the two sides’ bilateral technology war and rivalry.
In their first call since October, Chinese Vice-Premier Liu He was said to have had a “pragmatic and frank” exchange with US Treasury Secretary Janet Yellen on economic and tariff issues, as well as the importance of stabilising the global industrial and supply chains, according to the official Xinhua News Agency.
Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team.
“The exchanges were constructive,” the party mouthpiece said, adding that both sides believed that the global economy “is facing severe challenges, and it is of great significance to strengthen the communication and coordination of China-US macro policies”.
However, Chen Fengying, a senior researcher with the China Institutes of Contemporary International Relations, said after the talks that the tariffs have little impact on Chinese exports, which have seen extraordinary rises during the pandemic, and that Beijing will not make concessions.
“[Tariff cuts would be] for the sake of addressing US problems, and only non-strategic goods would be eligible,” she said. “It doesn’t mean an abrupt China policy change by the Biden administration, nor a halt of the ongoing tech war.”
Xinhua reported that the Chinese side expressed its thoughts on the US potentially lifting tariffs and sanctions imposed on China, as well as on the fair treatment of Chinese enterprises.
“The two sides agreed to maintain dialogue and communication,” the agency added.
Dow Jones reported on Monday that US President Joe Biden could announce his decision to roll back some tariffs on Chinese imports as soon as this week.
The phase-one trade deal between China and the US expired in December, with tariffs imposed by the Trump administration remaining on more than US$300 billion worth of Chinese imports.
In May, the Office of the US Trade Representative (USTR) told US businesses that it had begun a statutory process that could ultimately end up removing tariffs on Chinese goods. However, USTR Katherine Tai said last month that the tariffs were a “significant piece of leverage” to pressure China.
The notification, part of a legal requirement to review the tariffs years after they were first put into place, puts the burden on US businesses benefiting from those tariffs to speak out and say whether they want the policy to continue.
Under the policy, businesses have until Wednesday – the four-year anniversary of the first tariffs – to notify the USTR that they want them kept in place. That would then trigger a review from the trade office, which would include a period for the public to provide comments.
Lifting China tariffs would indicate an intention by the Biden administration to solve its livelihood, inflation and recession issues
Lu Xiang, Chinese Academy of Social Sciences
“That leverage theory is actually hurting the interests of American consumers,” said Lu Xiang, a US expert at the Chinese Academy of Social Sciences. “The US is at risk of a recession. Lifting China tariffs would indicate an intention by the Biden administration to solve its livelihood, inflation and recession issues.”
Yellen has maintained her call for the cancellation of some China tariffs in recent months, as US inflation rose to a four-decade high of 8.6 per cent in May.
In a statement following Tuesday’s talks, the US Department of the Treasury called it a “candid and substantive conversation”.
“They discussed macroeconomic and financial developments in the United States and China, the global economic outlook amid rising commodity prices, and food security challenges,” it said, while referring to the talks as being “part of the administration’s ongoing efforts to maintain open lines of communication”.
The statement added that Yellen raised various issues of concern during the talks, “including the impact of Russia’s war against Ukraine on the global economy, and unfair, non-market [Chinese] economic practices”.
She was also said to be looking forward to future chats with Vice-Premier Liu, though there was no indication of when such talks may transpire.
On the Chinese side, the Ministry of Foreign Affairs followed the call by reiterating its long-standing rhetoric that Washington should remove all tariffs on Chinese products.
Ministry spokesman Zhao Lijian also rebuffed US accusations of non-market actions and said China’s economic success over the past four decades was a result of its market opening up and reform, as well as the effective combination of market forces and the government’s role.
More from South China Morning Post:
This article As US-China talks resume, an end to years of trade tariffs may not signal a soft landing in rivalry first appeared on South China Morning Post