On Thursday, the US President Donald Trump hinted at progress in his high-stakes trade battle with China, saying talks with Beijing’s envoy had gone well. The remarks added to an atmosphere that had grown warmer during the day after Trump announced he would grant an audience at the White House to top Chinese trade envoy Liu He.
Trump told media persons, “I will say I think it’s going really well,” without giving any further details. “We had a very, very good negotiation with China.”
The new signs of comity were an abrupt improvement after a week in which Washington attacked Beijing with aggressive policy measures and talks appeared headed for a dead end, just days before US duties on $250 billion in Chinese imports are due to rise.
In recent weeks, the pressure on the two sides to defuse the confrontation has raised which clearly indicates the signs of increasing trade wars.
This year, China balked at Trump’s demands for a profound transformation to the way it manages its economy and analysts say Beijing is unlikely to adopt economic reforms that could undermine the Communist Party’s political power.
This week, speculation has instead stressed the possibility the two sides will seek to seal an incremental deal as a confidence-building measure. The head of international affairs at the US Chamber of Commerce, Myron Brilliant told reporters on Sunday that he had spoken with both sides and that an agreement on currency could emerge this week.
“I think that could lead to a decision by the US administration not to put forward a tariff rate hike on October 15,” he said. In August, the US Treasury branded China a currency manipulator and accused Beijing of deliberately weakening the RMB to gain an unfair trade advantage, making good on a Trump campaign pledge.
In the week, media reports had also said the Chinese side was preparing an offer that falls short of addressing Trump’s core grievances but would increase purchases of US farm exports and make smaller concessions in return for a pause in tariff increases.
Washington has recently blocked visas of senior Chinese officials and blacklisted more than two dozen Chinese firms accusing them of persecuting ethnic Uighur Muslims in China’s western Xinjiang region.
Washington further accuses China of attempting to dominate the global industry through massive state intervention in markets hacking and subsidies, theft of intellectual property.
Wendy Cutler, the vice president of the Asia Society Policy Institute told sources, “We all know the next round of tariffs is going to hurt the United States as much or more than China.”
“I think neither side will admit it but I think they’re both under pressure to find a way to forestall the next set of tariff increases,” she said.
She continued, “Every month that these trade talks continue, there’s more and more friction in the relationship.”