Mix-messages on next round of talks on US-China trade war

Roman Schwartz
September 14, 2018

He said on Twitter that a Wall Street Journal story on Wednesday about the talks invitation from Treasury Secretary Steven Mnuchin amid rising us political pressure on Trump to ease up on trade fights "has it wrong".

"We are under no pressure to make a deal with China, they are under pressure to make a deal with us", Mr Trump said in a tweet on Thursday.

The possible resumption of negotiations sent Asian markets rallying with Hong Kong surging 2.5 per cent - having fallen for six straight days and into a bear market - and Shanghai more than one per cent higher.

China is clearly under economic duress as its economy slows and the next round of 25 percent tariffs targeting US$200 billion worth of Chinese goods are made ready for launch in Washington. "We may think that China's rise may be bad for the USA, that China is a strategic competitor. but the moment China's growth rate declines, we will regret it", he said at the Milken Institute's annual Asia Summit in Singapore.

There was no immediate reaction by the US Treasury department to the report.

In Washington, White House economic advisor Larry Kudlow sounded a cautious note about the possible outcome of talks. The White House has accused China of forcing USA companies to partner with local firms and then stealing their intellectual property, among other grievances.

It is also important to note that things are only getting started in the trade conflict, and unless China is willing to make some major concessions, and soon, then the world is likely to witness a protracted conflict lasting years.

In a move to defuse trade war tensions, Beijing has welcomed Washington's offer to hold another meeting to sort out their differences.

"There's some discussions and information that we received that the Chinese government - the top of the Chinese government wished to pursue talks", Kudlow told Fox Business Network on Wednesday. "And so, Secretary Mnuchin, who is the team leader with China, has apparently issued an invitation". A meeting among cabinet-level officials could ease market worries over the escalating tariff war that threatens to engulf all trade between the world's two largest economies and raise costs for companies and consumers.

But Kudlow was non-committal over the chances of a breakthrough, adding: "I guarantee nothing".

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Envoys from the two countries last met August 22 in Washington but reported no progress.

United States companies in China say they are already feeling the pain from the trade war.

The Trump administration is poised to hit China, America's largest trading partner, with another $200 billion in tariffs.

One of the highest-profile casualties of the trade war was U.S. chipmaker Qualcomm's (QCOM) $44 billion acquisition of Dutch rival NXP Semiconductors (NXPI), which China killed in July by refusing to grant it regulatory approval.

China's Commerce Ministry said both sides would want to avoid escalation.

They are already affecting companies, particularly the automobile industry, and hurting economies.

AmCham China and AmCham Shanghai urged the Trump administration to re-think its approach.

Two-thirds of American companies that responded to a survey said they have suffered lost sales or lower profits due to that increase, two chambers of commerce reported Thursday.

AmCham's survey results come a day after more than 60 US industry groups launched a coalition called Americans For Free Trade, which aims to halt the White House's proposed tariffs.

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