China Looks to Defuse Trade Tensions, Asks US for Talks
Trade tensions between the world's two largest economies have risen since Trump took office in 2017, and although China only accounts for a small fraction of U.S. steel imports, its massive industry expansion has helped produce a global glut of steel that has driven down prices.
File image of a worker performing welding work on steel rods using a steel drill at a construction site. (Image: AP)
Beijing: President Xi Jinping's top economic adviser told U.S. business leaders in Washington that China hopes the White House will revive high-level dialogue on economic disputes and name a new chief liaison to defuse mounting trade tensions, a person briefed on the matter said.
The adviser, Liu He, said he will take charge of reform efforts this month and wants a list of U.S. demands for what China can do to ease tensions, according to the person, who requested anonymity to discuss a confidential meeting.
Liu was speaking at an event with executives including former Treasury Secretary Hank Paulson and the CEOs of JP Morgan Chase and chipmaker Qualcomm.
The requests were part of the conciliatory message that Liu was tasked with bringing this past week to the United States, China's largest trading partner. Instead, his trip was overshadowed by President Donald Trump's announcement Thursday of new tariffs on steel and aluminum imports.
In public pronouncements and meetings with U.S. delegations since 2013, China's ruling Communist Party has repeatedly pledged to allow free market competition to play a "decisive role" in China's economy as a guiding principle — something Liu reiterated this past week in Washington.
But U.S. officials and companies have been frustrated by a lack of implementation. They point to scarce progress China has made opening up sectors like financial services to foreign players, Chinese industrial policies that favor domestic firms and a yawning trade deficit that amounted to $375 billion in 2017. The U.S.-China Comprehensive Economic Dialogue mechanism that China is seeking to revive has largely been dormant under Trump.
After proposing tariffs of 25 percent on steel and 10 percent on aluminum from China and elsewhere on Thursday, Trump warned on Twitter that "trade wars are good and easy to win."
China's Commerce Ministry shot back late Friday, saying Trump's plan would "seriously damage multilateral trade mechanisms represented by the World Trade Organization and will surely have a huge impact on normal international trade order."
Liu met twice this past week with a White House team that included Treasury Secretary Steven Mnuchin, National Economic Council director Gary Cohn, and U.S. Trade Representative Robert Lighthizer, who is also overseeing an investigation into whether China is systematically violating U.S. intellectual property rights, particularly in the technology industry.
Liu also met separately with Stephen A. Schwarzman, the Blackstone Group chief executive who once led one of Trump's disbanded business councils and maintains relationships with top Chinese officials.
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