China's economy czar to join trade war talks in Washington

/ CBS/AP

Trump threatens more tariffs on China

Beijing – China confirmed Tuesday its economy czar will go to Washington for trade talks despite fears he might cancel after President Donald Trump threatened to escalate a tariff war over Beijing's technology ambitions. The announcement suggests President Xi Jinping's government is putting its desire to end a conflict that has battered Chinese exporters ahead of the political need to look tough in the face of U.S. pressure.

The decision to have Vice Premier Liu He, Xi's top economic adviser, take part in talks due to start Thursday might keep alive hopes the two biggest global economies could make peace as early as this week.

The Trump administration is pressing Beijing to roll back plans for government-led development of Chinese global competitors in robotics, electric cars and other technologies. Washington, Europe, Japan and other trading partners say those violate China's market-opening commitments and are based in part on stolen technology.

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Mr. Trump's announcement Sunday that he would increase tariffs on $200 billion of Chinese imports to 25 percent from 10 percent caused global stock markets to plunge. Markets steadied after a Chinese spokesman said Monday that envoys still were preparing to go to the U.S., though there was no word then whether Liu would take part. On Tuesday, the Shanghai Composite index surged 0.7 percent, and most other regional markets also rebounded.

The American side is led by Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin. A Chinese Commerce Ministry statement announcing Liu's plans gave no indication whether other details such as the size of his delegation might change.

Trump's new China tariff threats raise stakes for U.S. consumers

Washington and Beijing have raised tariffs on billions of dollars of each other's exports, disrupting trade in goods from soybeans to medical equipment. Estimates of lost potential sales so far range as high as $25 billion.

Both governments have said negotiations were making progress, but Mr. Trump expressed frustration Sunday at the pace. Lighthizer said Monday that the Chinese government was "reneging on prior commitments" that had been negotiated in 10 earlier rounds of talks. He also warned that the higher tariffs on China that Mr. Trump threatened over the weekend will take effect at 12:01 a.m. Eastern time Friday.

In response, Foreign Ministry spokesman Geng Shuang said Beijing "is sincere in continuing consultations." Asked whether China took President Trump's threat seriously, Geng said similar situations had happened "many times before."

"We hope the United States can still work together with China," Geng said at a news briefing. "On the basis of mutual respect and equality, we will resolve each other's legitimate concerns and strive to reach an agreement of mutual benefit and win-win."

The conflict is testing how far Beijing is willing to go in changing a state-led economic model it sees as the path to prosperity and global influence — and how much power Washington will have to enforce any agreement. The U.S. accuses Beijing of pressing foreign companies to hand over technology in exchange for market access, improperly subsidizing Chinese firms and stealing American trade secrets.

Bannon: Trump should proceed with tariffs if China doesn't come to an agreement

No details of the talks have been released. But private sector analysts said Beijing is willing to change details of its plans so long as it preserves the ruling Communist Party's dominant economic role.

The Trump administration has imposed 10 percent tariffs on $200 billion in Chinese imports and 25 percent tariffs on another $50 billion. The Chinese have retaliated by targeting $110 billion in U.S. imports.

Mr. Trump said Sunday he also planned to impose 25 percent tariffs on another $325 billion in Chinese products. That would extend penalties to everything China ships to the U.S., its biggest foreign customer.

A stumbling block in the talks is U.S. insistence on an enforcement mechanism with penalties if Beijing fails to keep its promises. The Trump administration wants to keep tariffs on Chinese imports to maintain leverage over Beijing.

First published on May 7, 2019 / 8:58 AM

© 2019 CBS Interactive Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.

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