WASHINGTON/BEIJING – China and the United States agreed Thursday to hold high-level talks in Washington in early October, encouraging investors who hope for a trade war thaw as new U.S. tariffs on Chinese consumer goods chip away at global growth.
The new talks were arranged during a phone call between Chinese Vice Premier Liu He, U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, China’s commerce ministry said in a statement.
They would be the first in-person, high-level discussions since a failed U.S.-China trade meeting at the end of July prompted U.S. President Donald Trump to proceed with fresh tariffs on virtually all Chinese imports that had at that time remained untouched by the trade war.
But there was no indication that the first round of these tariffs — a 15 percent duty on Chinese consumer goods imposed on Sept. 1 — would be rescinded, or that a planned Oct. 1 tariff increase, on $250 billion worth of goods already levied at 25 percent, would be halted.
The U.S. Trade Representative’s office did not confirm any more specific timing for the ministerial-level talks, saying only that they would take place “in the coming weeks.”
“In advance of these discussions, deputy-level meetings will take place in mid-September to lay the groundwork for meaningful progress,” USTR spokesman Jeff Emerson said in a statement.
The United States and China remain far apart on the substance of a deal to end their 14-month trade war, with little movement since the talks broke down in May. At that time, the United States accused China of backtracked on earlier commitments for sweeping changes to its laws and practices on intellectual property protections, transfers of U.S. technology to Chinese companies and increased U.S. access to the Chinese market.
Nonetheless, financial markets breathed a sigh of relief Thursday at potential cooling of the trade tensions between the world’s two largest economies. U.S., Asian and European stock indexes all touched one-month highs on the day.
Aiding the rally was positive U.S. economic data, including an estimate of private sector payrolls growth and an acceleration of U.S. services sector activity.
On Sunday, Washington began imposing 15 percent tariffs on an array of Chinese imports, mostly consumer products, while China began placing duties on U.S. crude oil. On Monday, China said it had lodged a complaint against the United States at the World Trade Organization.
Washington plans to increase the tariff rate to 30 percent from 25 percent on $250 billion worth of Chinese imports from Oct. 1.
The National Retail Federation said it was encouraged by confirmation of in-person trade talks, and urged Washington to end the trade war and work for a rollback of all tariffs.
“This trade war has gone on far too long, and the harmful consequences for American business and consumers continues to grow,” said the group, which bills itself as the world’s largest retail trade association.
China’s commerce ministry confirmed its trade team would consult with its U.S. counterpart in mid-September in preparation for negotiations in early October.
“Lead negotiators from both sides had a really good phone call this morning,” said China’s commerce ministry spokesman, Gao Feng, in a weekly briefing. “We’ll strive to achieve substantial progress during the 13th Sino-U.S. high-level negotiations in early October.”
Gao also said Beijing opposes any escalation in the trade war.
Trump had warned on Tuesday that he would be tougher on Beijing in a second term if trade talks dragged on, compounding market fears that disputes between the United States and China could trigger a U.S. recession.
On Thursday, Trump remained silent on Twitter about the newly agreed talks, and none of his key economic aides appeared on morning talk shows. Trump lashed out at Beijing in past months, frustrated by its failure to follow through on purchases of U.S. farm products that he’d said were agreed in his meeting with Chinese President Xi Jinping in June.
China, for its part, has been stung by Washington’s failure to make good on its promise to ease restrictions on Chinese tech giant Huawei Technologies Co. Ltd.
The escalating tit-for-tat tariffs are taking a toll on China’s economy, which Liu, the country’s top trade negotiator, said faces increasing downward pressure.