Confirmation of Liu’s travel plans lifted Chinese stock markets as his presence could raise hopes that a deal is still possible
BEIJING • China said yesterday its top trade negotiator will visit the US for talks with American counterparts this week even as Washington stepped up pressure with plans to hike tariffs and complaints that Beijing was backtracking on its commitments.
The Commerce Ministry confirmed in a statement that Vice Premier Liu He, President Xi Jinping’s pointman on trade, would visit the US tomorrow and on Friday.
The trip is taking place a day later than expected after US President Donald Trump jolted global markets by announcing that tariffs on US$200 billion (RM830 billion) in Chinese merchandise will more than double to 25% on Friday.
Confirmation of Liu’s travel plans lifted Chinese stock markets as his presence could raise hopes that a deal is still possible.
The Chinese Foreign Ministry had said on Monday that a delegation would still visit the US, but it dodged questions over whether Liu would lead it.
The tariffs announcement tanked stock markets worldwide and frightened US farmers and businesses caught in the crossfire, who have been banking on a resolution to the yearlong conflict that has engulfed US$360 billion in two-way trade.
But US shares recovered late in the day on Monday as investors apparently decided Trump was using tariff threats as a negotiating tactic.
US officials had said the world’s two largest economies were close to an agreement, but Beijing reversed course in recent days.
“Over the course of the last week or so, we’ve seen an erosion in commitments by China, I would say retreating from commitments that have already been made in our judgement,” US Trade Representative Robert Lighthizer was quoted as saying in media reports on Monday.
He said the tariffs would increase at 12:01am local time on Friday.
Treasury Secretary Steven Mnuchin described the negotiations as 90% complete, but told reporters that in recent days the talks went “substantially backward”, according to the media reports.
Trump had lashed out on Sunday, vowing not only to ratchet up existing tariffs this week, but also to extend the 25% punitive duties to the remaining US$350 billion in Chinese goods imported into the country each year.
“The Trade Deal with China continues but too slowly as they attempt to renegotiate. No!” he wrote on Twitter.
Comments from officials in recent weeks indicated the sides were making progress towards an agreement aimed at addressing longstanding concerns about the forced transfer or outright theft of American technology, as well as reducing the US trade deficit with China.
William Reinsch, trade policy expert at the Centre for Strategic and International Studies, said China will never meet all the US demands.
“At some point, the president is going to figure out that they’re not going to give him everything he wants,” he told AFP.
That will put Trump in “a precarious political position”, whether “to accept an agreement that will be criticised as weak, or not to have an agreement and be criticised for failing”.
“And I can imagine that he is unhappy about that.”
Freya Beamish of Pantheon Macroeconomics warned that Trump’s aggressive tactics could backfire.
“It is much harder for China’s leaders to do that if it looks like they have signed with a gun to their heads.”
US manufacturers and farmers were becoming more optimistic amid signs of progress and comments from officials that the talks were entering their final phase, reinforced by reports Beijing was sending 100 officials to this week’s negotiations.
Trump credits the tariffs with the strong first-quarter growth, but economists and businesses have complained that the trade conflict is in fact hurting the bottom line and the uncertainty is causing them to delay investment.
Jake Colvin of the National Foreign Trade Council, a pro-trade US business group, said the tariffs “come at the expense of American businesses and farmers, and consumers as well”.
And escalating the tariffs to the remaining Chinese goods, which would be expected to spark further retaliation from Beijing, would cut 0.3 percentage points off US growth, according to Oxford Economics.
Wells Fargo analyst Paul Christopher said with all the work that has gone into the talks, he still expects the two sides to reach an agreement, but he warned that “new tariffs or a breakdown in talks could undermine that outlook quickly”, slowing global growth and trade. — AFP