The US-China trade war, after upsetting the demand and supply forces and wasting billions on taxes, is finally headed towards a dialogue. White House economic adviser, Larry Kudlow, informed that both nations have resumed contact “at all levels” over trade, ahead of a planned meeting between US President Donald Trump and China’s Xi Jinping.
The current tensions or ongoing trade war, however, do not offer certainty that the matter will be resolved as the two leaders meet, yet “it’s better to talk than to not talk,” Kudlow expressed in his statement given to CNBC. Further, a top Chinese negotiator, Liu He, is expected to visit Washington for informal talks, Commerce Secretary, Wilbur Ross said.
The drift between two nations is a result of Trump’s sanctions, which instigated a dynamic business environment, affecting both economies up to a certain extent. However, sensitivity in regards to demand and supply, with huge imposition of taxes, has already given the indication that China are a weaker opposition. Therefore, the nation might have to agree on a lot of Trump administration policies, just in case it wants to reach a common accord.
Besides, Kudlow, also emphasized that communication taking place at all levels of US and Chinese government will help in preparing for the group of 20 leaders’ summit in Argentina. Another sign that both the nations are interested in resolving the crisis.
Correspondingly, according to the inside sources briefed in the matter, asking not to be named, a phone call happened between Treasury Secretary Steven Mnuchin and Liu, but it failed to yield any fruitful results.
“We are willing to negotiate with the U.S.,” Chinese Premier Li Keqiang said at an event on Tuesday in Singapore. He emphasized that the talks should be carried out on the basis of mutual respect and good faith.
The two nations have levied several rounds of taxes on each other’s’ goods. The biggest of, which is levied on Chinese imports worth $200 billion, due to increase to 25 percent in January, in case no agreement is signed before that time.
Apart from China, Trump’s focus is also on reducing the nation’s trade deficit with close allies like Germany and Japan. Therefore, his administration will reportedly not impose new tariffs on automobile imports any time soon.