BEIJING – China will dispatch Vice Commerce Minister Wang Shouwen to the U.S. for trade talks in late August, the first official exchanges since earlier negotiations broke down two months ago, China’s Ministry of Commerce said in a statement on its website on Thursday.
The Chinese delegation led by Wang will meet with an American group led by David Malpass, under secretary for international affairs at the Department of the Treasury, at the invitation of the U.S., the statement stated.
Beijing and Washington have slapped tariffs on tens of billions of dollars worth of each other’s goods since they held their last high-level meeting in June, raising fears that the trade war could shake the global economy.
“The Chinese side reiterates that it opposes unilateralism and trade protectionism practices and does not accept any unilateral trade restriction measures,” the ministry said.
“China welcomes dialogue and communication on the basis of reciprocity, equality and integrity.”
“This will be ‘talks about trade talks,’” said Gai Xinzhe, an analyst at the Bank of China’s Institute of International Finance in Beijing. “Lower-level officials will meet and haggle and see if there is a possibility for higher-level talks.”
China’s equity market has suffered declines and the yuan has been on a losing streak for more than a month. Chinese authorities, bracing for an economic fallout, have introduced measures to support growth ranging from shifting toward a more accommodative monetary policy to boosting fiscal spending.
US Commerce Minister Wilbur Ross held talks with Chinese Vice Premier Liu He in Beijing in June. Liu had met with US Treasury Secretary Steven Mnuchin in Washington a month earlier.
– Tit-for-tat –
But the discussions failed to reduce tensions as the United States slapped tariffs on $34 billion worth of Chinese goods in early July, triggering an immediate dollar-for-dollar retaliation from Beijing.
The two countries are expected to launch a new round of tit-for-tat tariffs on $16 billion worth of goods from each country on August 23.
Washington has also lined up an additional $200 billion in Chinese imports and US President Donald Trump said he could raise tariffs on those products to 25 percent instead of the previously touted 10 percent.
China responded by threatening in early August to impose new tariffs on $60 billion worth of US goods.
“It is hard to tell how the talks will go but it’s a positive signal that the two countries are looking for some compromise plan,” said Makoto Sengoku, market analyst at Tokai Tokyo Research Institute.
“If they were determined to fight it out, they wouldn’t meet,” he told AFP.
Larry Hu, head of greater China economics at the Macquarie Group, said the two sides may discuss what Beijing needs to do, such as increasing US imports, further opening its markets and making efforts to protect US intellectual property rights.
Depending on actions taken by China, the US side may discuss what it can do to temporarily prevent an escalation of the trade war, Hu said.
“I think we are still at an ice breaking stage, the two sides are testing each other’s bottom line,” he said, noting that it will be a lower-level meeting than the previous talks.
The yuan has declined in recent weeks, helping Chinese exporters as it makes their products cheaper, but it could fuel tensions with Trump, who has accused Beijing of manipulating its currency, AFP reported.
Chinese officials say the tariffs have yet to make an impact on the country’s economy, with its exports even beating forecasts in July.
The threatened tariffs on $200 billion worth of Chinese goods could have “some direct impact” on industrial production, employment, foreign trade and commodity prices, but “the overall impact is generally controllable,” Cong Liang, spokesman at the National Development and Reform Commission, told reporters on Wednesday.
But analysts warned that China could feel the full effect of tariffs in August.
Trump has boasted that trade wars are “easy to win” and warned he would hit virtually all Chinese imports if Beijing does not back down and take steps to reduce its $335 billion surplus with the US.
China does not import enough from the United States to match Washington dollar-for-dollar, but it has warned that it could fire back with other measures.
