USA reached out to China for new trade talks, sources say

Irving Hamilton
September 13, 2018

Clearly, Chinese officials are tired of the impact that their country will likely sustain if the trade war continues and Chinese companies are suitably penalized for years of unfair trade practices.

But Beijing has come up with a non-tariff move to deal with the escalating trade battle, and it's making many American businesses' worst fear come true.

Some businesses are concerned about rising costs of imported materials; others, particularly farmers, about retaliatory tariffs imposed by China and Europe on US exports.

"The White House has threatened to fire the next barrage of tariffs at $200 billion more Chinese goods, expecting with this onslaught, or subsequent ones, China will wave a white flag", he said.

The majority of American companies in China say they are hurting from the escalating trade spat, reporting increased costs, lower profits and stepped-up scrutiny, according to an American Chamber of Commerce in China survey released Thursday.

"The US side has proposed having discussions in the coming weeks and has asked the Chinese to dispatch a ministerial-level delegation".

Larry Kudlow, who heads the White House Economic Council, told Fox Business Network that U.S. Treasury Secretary Steven Mnuchin had sent an invitation to senior Chinese officials, but he declined to provide further details.

AmCham China and AmCham Shanghai urged the Trump administration to re-think its approach.

China is clearly under economic duress as its economy slows and the next round of 25 percent tariffs targeting US$200 billion worth of Chinese goods are made ready for launch in Washington.

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US business groups are escalating their fight against Trump's tariffs, with over 60 industry groups launching a coalition to put political pressure on the Trump administration to seek alternatives to tariffs.

About 30% of firms said they were shifting parts of their supply chains away from China and the United States to buy components from other places. -China talks would delay the duties.

Kudlow earlier told reporters outside the White House that communications with Beijing had "picked up a notch". "That's what we've been asking for months and months".

But he cautioned: "I guarantee nothing". "The invitation to negotiate reflects the attempt by some in the administration to 'make every effort to get the Chinese to address the USA demands before the tariffs hit, ' one of the people said".

In the currency market, the dollar eased a little on the trade talk hopes as well as on soft US wholesale price data, which undermined the case for a faster pace of policy tightening by the Federal Reserve.

"My guess is that they won't receive an enthusiastic response from the Chinese, because the Chinese probably just don't think that the Trump administration itself necessarily wants a deal or is willing to offer anything", Kennedy said during a research trip to China. "I don't see the Chinese running to the table to up their offer in any appreciable way".

Sixty-four percent of companies that responded to the AmCham survey, which was conducted between August 29 and September 5, said the first round of tariffs that Trump slapped on $50 billion in Chinese imports this year have negatively affected their operations, while 63 percent said the same about the equal amount of duties Beijing imposed in retaliation.

So far, the United States and China have hit $50 billion worth of each other's goods with tariffs in a dispute over USA demands that China make sweeping economic policy changes, including ending joint venture and technology transfer policies, rolling back industrial subsidy programs and better protecting American intellectual property. The White House has accused China of forcing USA companies to partner with local firms and then stealing their intellectual property, among other grievances.

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