China-US talks indicate both nations open to trade war settlement
Rhetoric continues as adviser Kudlow suggests tariffs are only ‘first proposals’
China’s ambassador to Washington held talks with the acting US secretary of state on Wednesday about simmering trade tension between the world’s two biggest economies, in a sign that both governments still hope to avert a full-blown trade war.
Cui Tiankai told John Sullivan, who has been acting as the top US diplomat since President Donald Trump fired Rex Tillerson last month, that Washington should “abandon unilateralism and trade protectionism as soon as possible” and “stop the 301 investigation into China”.
Mr Cui also called on the US to “resolve relevant disagreements with China through dialogue and consultation”.
The US state department said that Mr Sullivan “reiterated the need to restore fairness and balance to our economic ties” and that he and Mr Cui “agreed to remain in close communication on these and other bilateral, regional, and global issues of mutual concern”.
Earlier on Wednesday, China unveiled its own package of proposed tariffs on about $50bn of US products, including lucrative soyabean exports, in a tit-for-tat response to the tariffs on Chinese goods announced by the Trump administration on Tuesday.
The US says it is taking action against unfair Chinese trade practices such as forced technology transfers and intellectual property theft that are designed to bolster Beijing’s plans for industrial leadership as laid out in its “Made in China 2025” strategy.
Beijing has rejected these claims and accused Washington of violating World Trade Organization rules. The tit-for-tat tariffs will not come into force for several months and both governments have suggested that they are open to negotiations.
Larry Kudlow, Mr Trump’s chief economic adviser, tried to calm investors’ fears of a trade war on Wednesday, telling Fox Business: “These are just the first proposals [for tariffs] . . . I doubt if there’ll be any concrete actions for several months.”
But initial efforts at negotiation have been hampered by the personnel turmoil in the Trump administration, a point underlined by China’s ambassador holding talks with the acting secretary of state because Mr Trump’s nominee to replace Mr Tillerson, Mike Pompeo, is still awaiting his Senate confirmation hearing.
Jacob Parker, vice-president of China operations at the US-China Business Council, said “no one wins in a trade war”, reiterating the view of many investors.
“Business wants to see solutions to the problems — results that will positively address the technology protection issues — not just tariffs and counter-tariffs that will do more harm than good,” he said.
The European Chamber of Commerce in China, which has become increasingly vocal about the lack of fair market access, called on Chinese President Xi Jinping to do his part to avert a trade war by delivering on commitments to open the economy to foreign investment.
“As a large and responsible proponent of economic globalisation, the simplest way to avoid any further disputes that could further disrupt global trade is for China to implement the measures that it has loudly and repeatedly committed itself to since President Xi’s speech at Davos in 2017,” said Mats Harborn, the chamber’s president.