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China, US Hold Delayed Trade Meeting to Discuss ‘Phase 1’ Deal

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Pacific Money | Economy

China, US Hold Delayed Trade Meeting to Discuss ‘Phase 1’ Deal

Both the U.S. and China expressed satisfaction with the talks and the implementation of the deal thus far.

China, US Hold Delayed Trade Meeting to Discuss ‘Phase 1’ Deal
Credit: USDA photo by Lance Cheung

U.S. and Chinese trade envoys discussed strengthening coordination of their countries’ economic policies during a phone meeting Tuesday, the Chinese Ministry of Commerce announced.

The announcement gave no details of the meeting held as part of the “Phase 1” truce aimed at ending a tariff war between the two biggest global economies that has disrupted worldwide trade.

President Xi Jinping’s government has lobbied Washington since at least 2016 to coordinate macroeconomic policies. Beijing has given no details, but such policies can include economic growth, employment, inflation, and trade.

Tuesday’s meeting included Chinese Vice Premier Liu He, U.S. Trade Representative Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin, the ministry said.

“The two sides had a constructive dialogue on strengthening the coordination of the macroeconomic policies of the two countries and the implementation of the ‘Phase 1’ agreement,” a ministry statement said.

A statement from the Office of the U.S. Trade Representative said that the officials in the call discussed “steps that China has taken to effectuate structural changes,” including greater protection of intellectual property rights and more equal market access for U.S. firms. “Both sides see progress and are committed to taking the steps necessary to ensure the success of the agreement,” the statement concluded.

Under the “Phase 1” agreement signed in January, both governments agreed to suspend additional penalties on each other’s goods in a fight launched by President Donald Trump in 2018 over Beijing’s technology ambitions and trade surplus.

That deal has stayed in place despite a growing array of irritants in U.S.-Chinese relations including the status of Hong Kong, the handling of the coronavirus pandemic and accusations of human rights violations in China’s Muslim northwestern territory of Xinjiang.

Beijing promised as part of the “Phase 1” agreement to narrow its trade surplus with the United States by purchasing more American farm goods. Trump’s economic adviser, Larry Kudlow, told reporters last week the White House is satisfied with Beijing’s purchases so far.

The truce called for talks to be held after six months, but those were delayed due to the coronavirus pandemic. A meeting scheduled for August 15 was to be held online but was postponed. U.S. President Donald Trump had said that he canceled the talks because “I don’t want to talk to China right now.”

“What China did to the world was unthinkable,” he added, referring to his frequent claims that China is to blame for the coronavirus pandemic.

The mere fact of the call itself, then, was a welcome sign amid tense U.S.-China relations.

The two governments have yet to announce plans for face-to-face talks in the next stage of negotiations.

Washington and Beijing have rolled back some penalties but most of the punitive tariffs imposed on hundreds of billions of dollars of each other’s goods remain in place.

By Joe McDonald for the Associated Press in Beijing, China with additional reporting by The Diplomat.