WASHINGTON: Washington and Beijing are working to revive pivotal talks aimed at ending the trade war that has roiled world markets, president Donald Trump’s chief economic advisor said Sunday.
If calls between both sides’ deputies pan out in the next 10 days “and we can have a substantive renewal of negotiations,” Larry Kudlow said on “Fox News Sunday,” “then we are planning to have China come to the USA and meet with our principals to continue the negotiations.”
The US president himself weighed in on Twitter, saying, “We are doing very well with China, and talking!”
In another tweet, he added that the US economy was “poised for big growth after trade deals are completed,” and that China is “eating tariffs.”
Yet it was unclear whether a Chinese delegation would be coming to Washington next month, as a White House spokesperson predicted in July after US trade representative Robert Lighthizer and treasury secretary Steven Mnuchin left a round of trade talks in Shanghai.
Kudlow nonetheless emphasised that high-level phone discussions last week were “a lot more positive than has been reported.”
The talks involved Lighthizer and Mnuchin on the US side and vice premier Liu He and commerce secretary Zhong Shan representing China.
World financial markets have been on edge amid signs pointing to a possible global economic slowdown, notably because of the trade war between the world’s two largest economies and have been reacting nervously to even the slightest new indicator.
No fear of optimism
But Kudlow insisted that the outlook was far from gloomy.
“Let’s not be afraid of optimism,” he said, adding that “I sure don’t see a recession.”
The US-China negotiations began in earnest in January and seemed at first to make progress, raising hopes that a trade deal could be rapidly reached.
But during the spring, the US president abruptly called off the talks, saying the Chinese had reneged on earlier commitments.
The discussions resumed in June at the highest levels in the margins of the G20 summit meeting in Osaka, Japan, when Trump met with his Chinese counterpart Xi Jinping.
But markets were hit with a fresh surprise when Trump suddenly announced that as of Sept 1 he was imposing punitive 10% on US$300 billion in Chinese goods that had so far been spared.
Then came the announcement Tuesday that Trump, presumably with an eye on the 2020 elections would delay imposing the tariffs until Dec 15 so as not to cast a shadow on Americans’ Christmas shopping plans.
The delay was seen as a concession to China and a backhanded admission that the tariffs, despite Trump’s repeated insistence to the contrary could in fact affect US consumers.
Impact on US denied
Nonetheless, the president’s chief trade advisor, Peter Navarro, firmly rejected that notion in television appearances Sunday.
He said Trump had decided on the postponement only after several company heads told him their contracts with Chinese suppliers were denominated in dollars, meaning they got no benefit from the weakening of the Chinese yuan and their orders ahead of the year-end holidays would be hard-hit.
Navarro vigorously rejected the notion that the tariff war is hurting American consumers, despite studies to the contrary by the International Monetary Fund (IMF), Harvard University and the Federal Reserve Bank of Boston.
“We’re seeing production investment and supply-chain sourcing move, haemorrhaging from China,” Navarro said, with Southeast Asia and the US benefiting.