China and the US are Negotiating to Improve Trade Relations
The Trump administration sent out specific requests to China that include a reduction of Chinese tariffs on US cars, more Chinese purchases of US semiconductors and greater access to China’s financial sector by American companies, the people said.
The behind-the-scenes discussions might come as relief to those rattled by announcements last week of US plans to hit China with tariffs, investment restrictions and other measures aimed at addressing the US’s $375bn merchandise trade deficit with the world’s second-leading economic power.
The announcement — and the immediate threat of Chinese retaliation — sent US stock prices into a sharp decline.
Trump last week hinted the US was employing both carrot and stick. “We’ve spoken to China and we’re in the midst of a very large negotiation,” he said on Thursday as he announced he was threatening China with tariffs on as much as $60bn in imports and other restrictions. “We’ll see where that takes us.”
Although Beijing reacted angrily to the US tariff threat, Chinese officials have been careful not to escalate the fight by much. China’s Commerce Ministry accused the US of “setting a vile precedent,” and rolled out penalties against $3bn in US goods including fruit, pork, recycled aluminium and steel pipes. The ministry said those measures were aimed directly at new US tariffs on Chinese steel and aluminium.
Yet so far, China hasn’t included on its retaliatory list any mention of the biggest US exports to China such as soybeans, sorghum and Boeing aircraft, which to some observers underscores Beijing’s willingness to negotiate a solution with the Trump administration.
The US actually assesses tariffs of 2.5% on imported cars; China’s is 25%. In other areas, the US has higher tariffs than those charged by trading partners, including a 25% tariff on imported pickup trucks and stiff levies on some agricultural products like peanuts.
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Published: Business Live
Written by: Lingling Wei and Bob Davis