US sends China to-do list to cut trade imbalances

Chinese Vice Premier Liu He attends the news conference following the closing session of the National People’s Congress (NPC), at the Great Hall of the People in Beijing, China March 20, 2018. (Reuters pic)

BEIJING: The US administration last week sent a letter to Chinese economic overseer Liu He seeking a tariff cut on US autos to help cut China’s trade surplus with the United States, the Wall Street Journal said, citing unnamed sources.

In the letter, US Treasury Secretary Steven Mnuchin and US Trade Representative Robert Lighthizer said China should also buy more US semiconductors and give US firms greater access to the Chinese financial sector, the Journal said, quoting sources with knowledge of the matter.

In the past few days, fears of a trade war have mounted following US President Donald Trump announcement on Thursday of plans for tariffs on up to US$60 billion of Chinese goods.

Firing a retaliatory warning shot in response to separate US tariffs on steel and aluminium, China declared plans to levy additional duties on up to US$3 billion of US imports.

The deepening rift has sent a chill through financial markets and the corporate world as investors predicted dire consequences for the global economy should trade barriers start going up.

Liu He, one of China’s newly appointed vice premiers, told Mnuchin in a telephone call on Saturday that the US has flouted trade rules with its inquiry into intellectual property, and that China will defend its interests.

US officials say an eight-month probe under the 1974 US Trade Act has found that China engages in unfair trade practices by forcing American investors to turn over key technologies to Chinese firms.