China urges US to cancel tariffs in bilateral test of engagement

WASHINGTON, Oct. 8 (Reuters) – China said on Saturday it was urging the United States to eliminate tariffs during talks among senior trade officials from countries Washington saw as a test of bilateral engagement between the world’s largest economies.

Virtual talks between US Trade Representative Katherine Tai and Chinese Vice Premier Liu He follow Tai’s announcement on Monday that she would seek “frank” talks and force China to honor its commitments under ‘phase 1’ trade deal brokered by former President Donald Trump.

“The Chinese side negotiated the cancellation of tariffs and sanctions, and clarified its position on China’s economic development model and industrial policies,” Chinese state news agency Xinhua told the outcome of the talks, which were held Friday, Washington time.

Tai intended to use the call, the second of the two, to test whether the bilateral engagement can respond to complaints from the United States about Beijing’s trade and subsidy practices, an official said. USTR.

“Ambassador Tai and Vice Premier Liu reviewed the implementation of the US-China Economic and Trade Agreement and agreed that the two sides will consult on some outstanding issues,” USTR said in a statement.

Xinhua said the two sides “expressed their main concerns and agreed to resolve the reasonable concerns of the other through consultations.”

“The two sides agree to continue to communicate with an equal approach and mutual respect, and to create the conditions for the healthy development of economic and trade relations between the two countries and the recovery of the world economy.” It said.

UNITED STATES CITES AUTHORITY-CENTERED CHINA-CENTERED APPROACH

During a briefing before the call, a senior USTR official said Tai would give Liu an assessment of China’s performance in implementing the Phase 1 agreement, including the promised purchases of American products that do not meet the targets. She would also voice her concerns about China’s “non-market” economic practices.

“We recognize that Beijing is increasingly explicit that it is doubling down on its authoritarian state-centric approach and resisting addressing our structural concerns,” the official said. “Therefore, our main focus will continue to be on building resilience and competitiveness, diversifying markets and limiting the impact of Beijing’s harmful practices.”

The official said Tai would base his future engagement with China on “how China is responding to tonight’s call” and declined to discuss possible next steps, but added that Tai will not seek to negotiate the issue. phase 2 with Beijing on state subsidies and other structural issues.

The Phase 1 deal in January eased a long tariff war between the world’s two largest economies. He mainly focused on China’s pledge to increase purchases of US agricultural and manufactured goods, energy and services by $ 200 billion over two years, as well as increased copyright protection. , trademarks and other forms of intellectual property.

The Trump administration has considered a Phase 2 negotiation to follow to tackle more difficult issues such as subsidies to state-owned enterprises and China’s strategic industrial policies.

Asked whether the United States would resort to another “Section 301” investigation that could lead to increased tariffs on Chinese products if the engagement with Beijing fails, the official said the United States would use “the full range of tools we have to protect American workers.” , farmers and businesses against unfair trading practices. “

Tai, who is fluent in Mandarin and the daughter of immigrants from Taiwan, sees the appeal as “a test of whether or not this kind of engagement will help achieve the results we’re looking for, and we’re moving forward with it.” the hopes that China responds positively, ”the USTR official said.

Reporting by David Lawder and Michael Martina in Washington and Engen Tham in Shanghai; Editing by Rosalba O’Brien and William Mallard

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