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U.S., China to launch trade talks; China hawk Navarro's role reduced -officials

Reuters  |  WASHINGTON 

By and Steve Holland

(Reuters) - The and launch trade talks on Thursday in a bid to avert a damaging tariff war, with the White House's harshest relegated to a supporting role, senior officials said on Wednesday.

Peter Navarro, the trade and adviser, will not be a on the U.S. side, two officials said. Instead, Steven Mnuchin, Commerce and U.S. Trade will lead the American delegation in talks with Chinese Liu He, the top economic adviser to President

Navarro, of the book "Death by China," has been the loudest "nationalist" voice on trade policy in the administration and a for punitive tariffs on Chinese goods to try to force to change its trade practices.

He attended an initial round of talks two weeks ago in that amounted to presentations of lengthy trade demands by each side. Navarro's shift away from a lead role in the talks comes amid a growing rift over trade policy with Mnuchin, who has favoured more achievable deals to open China's economy to U.S. firms and ease tariff threats.

Navarro and Mnuchin had an angry exchange on the trip and ties were so strained some participants openly wondered how they would get along on the same plane on the long U.S.-flights, a person familiar with the episode said.

The talks will start as USTR finishes up public hearings on the first batch of U.S. tariffs on $50 billion worth of Chinese goods proposed as punishment for alleged violations of U.S. intellectual rights.

The tariffs, which target Chinese electrical and machinery part, autos and flat-screen television sets, could take effect in early June, and may be followed by an additional round targeting $100 billion worth of Chinese goods yet to be identified.

China has promised to retaliate in equal measure, targeting U.S. soybeans, aircraft, autos and other goods for additional tariffs, causing U.S. farm commodity prices to fall.

LIU PLEDGES HARD WORK

Liu, who is China's top economic official, told U.S. lawmakers on Wednesday that he would work hard to address the U.S.-China trade imbalance and other problems with the trading relationship.

Members of the trade- and tax-focused said they told Liu that he needed to address U.S. concerns about intellectual property theft, forced technology transfers, and barriers to investment in China and U.S. agricultural exports.

Kevin Brady, the committee's Republican chairman, said he urged Liu to keep working with the administration toward a solution.

"He recognises there are problems in this trade relationship," Brady said of Liu after the meeting. "And his hope for this trip was to begin to address the trade imbalance, increasing demand of Chinese consumers for U.S. products, as well as to begin to take steps on the structural reforms."

Liu left the meeting with several other Chinese officials without speaking to reporters.

Senator Orrin Hatch, of the Senate Finance Committee, said after a meeting with Liu that he doubted the Chinese would agree to steps that would warrant backing off the tariff threat.

Asked if he thought Trump would proceed with the tariffs, Hatch said: "I think we have to. We can't let them do some of these things that really fly in the face of without some sort of response by us."

NO DISCUSSIONS ON ZTE

The lawmakers said the meeting did not address Trump's pledge on Sunday to help Chinese Corp <000063.SZ> get back in after a Commerce Department ban cut off its supply of U.S. components.

Trump said in tweets on Wednesday that "nothing has happened" with China's Corp and that Beijing has "much to give" on trade, denying suggestions that his administration was "folding" in negotiations with Beijing.

Trump on Monday had defended his decision to revisit penalties on for flouting U.S. sanctions on trade with Iran, in part by saying it was reflective of the larger trade deal the is negotiating with China.

"Nothing has happened with ZTE except as it pertains to the larger trade deal," Trump wrote on

"We have not seen China's demands yet, which should be few in that previous U.S. Administrations have done so poorly in negotiating. The U.S. has very little to give, because it has given so much over the years. China has much to give!"

(Reporting by and Steve Holland; Additional reporting by Doina Chiacu; Editing by and Peter Cooney)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, May 17 2018. 05:36 IST
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