China, US to hold talks to cool trade conflict

Posted on by KNBT

BEIJING: China said on Thursday a delegation would attend the next round of trade talks with US counterparts in Washington later this month, in the latest bid to diffuse a conflict that has set world markets on edge.

A Chinese delegation led by Vice Minister of Commerce Wang Shouwen will hold talks with US representatives led by Under Secretary of Treasury for International Affairs David Malpass, the Ministry of Commerce said in a statement on its website.

China and the United States have implemented several rounds of tit-for-tat tariffs on each others goods since the start of the year and have threatened further tariffs on exports worth hundreds of billions of dollars.

The announcement by the Chinese commerce ministry of the planned meeting in late August comes after a lull in talks between the two sides. The last official round of talks was in early June when US Commerce Secretary Wilbur Ross met Chinese Vice Premier Liu He in Beijing.

There was no immediate response from the US Treasury to the announcement from Beijing.

While Liu and Ross had also been involved in the four previous rounds, US Treasury Secretary Steven Mnuchin absence from the coming round rendered it a lower-level meeting.

Having made little progress in the previous meetings, the White House said on August 3 that the United States is open to further talks with China on how to resolve the festering trade dispute.

News of the talks boosted China’s yuan currency and its stock markets, which have been hit hard by negative sentiment related to the trade war and a slowing domestic economy.

The offshore Chinese yuan rose briefly on the news against the dollar, strengthening to a high of 6.9165 before paring gains.

Chinese stocks also reversed losses Thursday morning after the announcement of further trade talks. The SCI 300 Index was up 0.59 per cent by mid-morning, having fallen as much as 1.8 per cent shortly after open.

US futures also gained, as Dow e-minis gained 0.45 per cent on the news.

Easing trade tensions helped lift Chinese copper futures off 14-month lows. Worries about damage to the global economy from the dispute have hurt prices, which hit their lowest since June 2017 overnight.

Prices of Chinese farm goods fell amid hopes that supplies of US soybeans, used to make cooking oil and animal feed, may resume if talks bring an end to the dispute.

Unless there is some breakthrough the United States and China are preparing to a next round of retaliatory levies, having implemented tariffs on $34 billion of each other’s exports on July 6.

Washington is due to activate additional tariffs on $16 billion of Chinese goods on August 23, and Beijing has said it will respond in kind.

Separately, China has said it is prepared to put additional tariffs on 5,207 goods imported from the United States with a total value of $60 billion, ranging from liquefied natural gas to some aircraft.

The move was in response to a threat from Washington to increase tariffs on $200 billion worth of Chinese goods to 25 per cent from 10 per cent.

Prices of Chinese farm goods fell amid hopes that supplies of US soybeans, used to make cooking oil and animal feed, may resume if talks bring an end to the dispute. Soybeans and other grains from the United States were hit with extra import tariffs last month, bringing trade almost to a halt, as part of the tit-for-tat dispute between the world’s two largest economies.

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