Trade tensions between the US and China have eased in the past two days after comments by Trump administration officials who said they’re optimistic that negotiators will be able to find common ground.
National Economic Council Director Larry Kudlow said Tuesday that scheduled talks in Washington, DC, later this month will go on as planned, dispelling a report from the Financial Times that said Vice Premier Liu He would not make the trip to the US.
White House Council of Economic Advisers Chair Kevin Hassett said on CNN he’s “confident” that an agreement will be hammered out and talks are moving ahead.
“There’s a lot of progress to be made but it’s a very strong situation right now,” Hassett said. “And I think the Chinese recognize that they’ve got a big potential gain for coming up with a deal because as you mentioned their growth has really fallen off the cliff.”
US and Chinese negotiators met two weeks ago in Beijing to lay the groundwork for a potential deal to end the tit-for-tat trade war that’s been ongoing since the middle of last year. Officials from both sides said the talks went well, but since then it’s been revealed that China wouldn’t budge on some issues that are key to the Trump administration.
Presidents Donald Trump and Xi Jinping met in early December and worked out a temporary deal under which the US would delay scheduled hikes on tariffs in exchange for China agreeing to buy more agricultural products and lower levies on American automobiles. Both sides have lived up to their commitments thus far.
The talks, scheduled for Jan. 30-31, come at what some analysts are calling a critical juncture for China. The Asian nation, the world’s second-largest economy behind the US, said this week that economic expansion in 2018 fell to 6.6%, its slowest pace in 28 years. The International Monetary Fund pared its outlook for global growth to 3.5% in 2019 from a prior outlook for 3.7%, citing the trade war between the US and China.
Negotiations may be hampered as the US Department of Justice seeks to extradite Huawei Technologies Chief Financial Officer Meng Wanzhou, who was arrested in Canada last month on allegations that she’s committed conspiracy to defraud US banks.
Wang Qishan, the vice president of China, said at the World Economic Forum Wednesday that the ongoing trade battle between the countries hurts both sides. The US and Chinese economies are “mutually indispensable,” he said during his speech in Davos, according to media reports.
“This is a reality, either side can’t do without the other side,” he said. “So, the conclusion is that there has to be a mutual benefit and win-win.”