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US proposing new trade talks with China

A worker places US and China flags near the Forbidden City ahead of a visit by US President Donald Trump to Beijing, in Beijing, China November 8, 2017. Photo: Reuters 

The Trump administration has invited Chinese officials to restart trade talks, the White House's top economic adviser said on Wednesday, as Washington prepares to escalate the US-China trade war with tariffs on $200 billion worth of Chinese goods.

Larry Kudlow, who heads the White House Economic Council, told Fox Business Network that US Treasury Secretary Steven Mnuchin had sent an invitation to senior Chinese officials, proposing a meeting in the next few weeks to discuss trade issues, but he declined to provide further details.

"There's some discussions and information that we received that the Chinese government – the top of the Chinese government wished to pursue talks," Kudlow said. "And so, Secretary Mnuchin, who is the team leader with China, has apparently issued an invitation."

"It's positive thing,' said Kudlow. "We are in communication right now and you could say that communication has picked up a notch."

"I think most of us think it's better to talk than not to talk, and I think the Chinese government is willing to talk," Kudlow said.

Two people familiar with the effort said that Mnuchin's invitation was sent to his Chinese counterparts, including Vice Premier Liu He, the top economic adviser to Chinese President Xi Jinping, for talks in coming weeks.

Asked if the Trump administration would like to have additional trade talks with China, Kudlow said: "If they come to the table in a serious way to generate some positive results, yes, of course. That's what we've been asking for months and months.”

But he cautioned: "I guarantee nothing."

The proposal may reduce bilateral tensions just days after Trump threatened to slap tariffs on nearly all goods the United States buys from China.

The White House has sought to pressure Beijing to reduce its trade surplus with America and protect intellectual property rights of US companies.

The Trump administration is preparing to activate tariffs on $200 billion worth of Chinese goods, hitting a broad array of internet technology products and consumer goods from handbags to bicycles to furniture. It was unclear whether any US-China talks would delay the duties.

China has said that it would be forced to retaliate against all of the United States' measures, fanning concerns that the trade war could dent the global economic outlook.

Efforts to end the trade war have fizzled so far. Officials from both countries have met four times for formal talks, most recently in August, when Treasury's undersecretary for international affairs, David Malpass, led discussions in Washington with Chinese Vice Minister Wang Shouwen.

But those talks ended without a breakthrough, as the United States submitted a tweaked list of demands that Beijing had previously said was unworkable, including a condition that China reduce its trade surplus with America. Last week, Kudlow complained that the Chinese have offered few concessions, and he underscored the president's willingness to hold firm, despite Trump's personal friendship with Chinese President Xi Jinping.

So far, the United States and China have hit $50 billion worth of each other's goods with tariffs in a dispute over US demands that China make sweeping economic policy changes, including ending joint venture and technology transfer policies, rolling back industrial subsidy programs and better protecting American intellectual property.

US business groups are escalating their fight against Trump's tariffs, with over 60 industry groups launching a coalition to put political pressure on the Trump administration to seek alternatives to tariffs.

Most China specialists have voiced concerns over both the tit-for-tat tariff war and the growing hostility between world's top two economies, which has seen normal dialogue disrupted and bilateral ties hitting a low not seen since the 1989 Tiananmen crackdown.

Steve Tsang, director of the SOAS China Institute in London, said that both sides should resume high-level talks to solve their differences, considering the extent of the countries' economic inter-dependence.

China was the United States' third-largest export destination after Canada and Mexico last year, according to US Census Bureau data. America is China's largest export market.

"The unfolding trade war is indeed a big deal, but it has not reached a point that make it impossible to contain," he said.

Orville Schell, director of the Centre on US-China Relations at the Asia Society in New York, said that the current trade stand-off was much bigger than trade differences amid their growing geopolitical rivalry.

"I think what's really needed is to have really smart people at senior level … to work out a new road map for a better US-China relationship and we'll each agree to give some necessary concessions," he said.

"But we don't have anyone like that, so there is no mechanism to do it and I don't think Trump is capable of it."
 


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