China, U.S. Hint at Chance for Talks After Trump's Tariff Threat

Date: Friday, July 13, 2018
Source: Bloomberg

Chinese and U.S. officials have raised the prospect of resuming talks over trade between the two nations after President Donald Trump ratcheted up the pressure by announcing a huge new round of potential tariffs.

After the U.S. unveiled a list of Chinese imports worth $200 billion that could face higher duties, China’s Vice Minister of Commerce Wang Shouwen said “when we have a trade problem, we should talk about it.” While that came amid fresh threats of retaliation from Beijing, it matches some willingness from the Trump team to resume talks at a high level, according to a person familiar with the administration’s thinking.

Communications between senior members of the Trump and Xi administrations have petered out since a third round of formal negotiations ended with scant signs of agreement in early June. The U.S. pushed ahead with a plan to slap 25 percent tariffs on more than $30 billion of Chinese shipments last week, spurring retaliation in kind from Beijing. Trump’s latest salvo threatens to push the trade fight into new territory, with China limited in using tariffs to push back. The government has, however, vowed to respond.

“We should sit down and try to find a solution to this trade problem,” Wang said in an interview with Bloomberg in Geneva on Wednesday.

Asian stocks rose Thursday after a bruising sell-off the previous day, despite there being little fresh evidence that the trade tensions would abate. The yen declined against the dollar and crude oil rebounded from its biggest plunge in two years on Wednesday.

Washington and Beijing now have about seven weeks to strike a deal or dig in for a trade war that could upend corporate supply chains and raise prices for consumers around the world. The U.S. tariffs on $200 billion of Chinese goods are scheduled to take effect after Aug. 30, when the Trump administration’s consultation process ends.

“China has said many times that the premise for negotiations is honoring one’s word. To my knowledge, the two sides haven’t been in touch to renew talks,” Gao Feng, spokesman of Ministry of Commerce said at a press conference in Beijing. “We don’t want to have a trade war. We are not afraid of one, and we will fight one if forced to,” he said.

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