Top US officials are preparing a trip to China before the end of July in a bid to reignite talks to resolve the trade dispute between the world’s two largest economies, administration officials said on Tuesday.
The resumption of face-to-face negotiations between Washington and Beijing has been widely expected after Donald Trump, the US president, and Xi Jinping, the Chinese president, struck a truce at the G20 summit in Japan last month, refraining from further tariffs and setting the stage for more discussions.
However, a series of skirmishes over goodwill gestures meant to pave the way for the talks to restart — on Chinese purchases of agricultural goods and the US ban on doing business with Huawei, the Chinese telecommunications company — had cast doubt on a quick return to the negotiating table.
Hong Kong’s Hang Seng index and China’s CSI 300 benchmark of Shanghai and Shenzhen-listed shares rose 1 per cent on the news while Australia’s S&P/ASX 200 was up 0.7 per cent and Japan’s Topix was up 0.3 per cent.
Speaking outside the White House on Tuesday, Larry Kudlow, the White House director of the National Economic Council, said it “looks like there will be a trip to China”, which would be a “very good sign”.
The US delegation to China is expected to be led by Robert Lighthizer, the US trade representative, and Steven Mnuchin, the US Treasury secretary.
The collapse in the negotiations led Mr Trump to raise tariffs on $200bn of Chinese imports from 10 per cent to 25 per cent, and threaten to slap 25 per cent levies on a further $300bn worth of products, which would mean all Chinese imports would be covered by US tariffs. The new escalation was exacerbated by Washington’s move to place Huawei on an export blacklist.
Since then, Mr Trump has indicated a willingness to relax the Huawei ban, which would allow US technology companies to continue selling to the Chinese company in certain circumstances.
On Monday, top technology executives met with Mr Trump to secure his agreement on the need for more rapid licensing decisions from the commerce department on sales to Huawei — a gesture that will have been welcomed in Beijing. Meanwhile, Mr Kudlow said Chinese officials were moving to reboot their purchases of US farm products.
Reaching a final agreement to end the trade war could still take a long time and may never happen. Before the negotiations broke apart in May, officials were haggling over how China would abide by its commitments, as well as the scale of concessions on issues like forced technology transfer and intellectual property theft.
There were still unresolved questions regarding market access and regulatory provisions of the deal, according to people briefed on the talks, as well as the scale and nature of US goods that China would agree to purchase.
More importantly, it is unclear how much political will there is both in Washington and Beijing to strike a deal that could trigger a backlash from hardliners in each country. Although equity markets have been buoyant, the US-China trade war is still weighing on the global economy, and was one of the factors that led the IMF to lower its estimate for global gross domestic product growth this year to 3.2 per cent.