China said Thursday it will resume trade talks with the U.S. and send top negotiators to Washington in early October, causing stock markets to soar amid rumblings from Beijing that the new round of talks will halt an escalating tariff war.
The Chinese Commerce Ministry said Beijing’s top trade negotiator, Vice Premier Liu He, agreed to the October visit in a phone call with Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert E. Lighthizer. China also said “serious” mid-level talks will begin in mid-September in preparation for “meaningful progress” next month.
The new round of talks will be the 13th between the world’s two largest economies over 18 months of retaliatory tariffs that have hurt both countries and roiled world markets. The last set of talks broke down in May over how to enforce any agreement.
There were indications from China on Thursday that Beijing expects the upcoming negotiations to be more fruitful. The Taoran Notes, a blog followed closely for insight into Chinese intentions, said it’s “very likely” there will be “new developments” in the pending trade talks.
The blog noted that the Chinese ministry hasn’t used the phrase “meaningful progress” since the talks in May fell apart.
And Hu Xijin, editor-in-chief of the Global Times, a tabloid under the official Communist Party People’s Daily newspaper, tweeted that “there’s more possibility of a breakthrough between the two sides.”
The announcement of new talks sent U.S. stocks higher. The Dow Jones Industrial average rose 372 points, or 1.4%, to close at 26,728. The tech-heavy Nasdaq and the S&P 500 showed similar gains.
Mr. Trump is heading into the new round of talks claiming the upper hand. He said Wednesday that China’s economy is having its worst year in more than a half-century.
“They’re having a supply chain that’s being absolutely fractured and broken, which is very bad for them,” Mr. Trump told reporters. “They’ve lost 3 million jobs, and the jobs are moving to Vietnam and other places, including the United States. If I were China, I’d want to make a deal. We’ll see if we can do a real deal, not a fake deal.”
The U.S. economy is still adding jobs amid near-record low unemployment of 3.9%. The private payroll firm ADP reported Thursday that employers added 195,000 jobs in August; the Labor Department’s report for August employment comes out Friday.
“Really Good Jobs Numbers!” the president tweeted.
But there are signs that the trade war is wearing on U.S. farmers and the manufacturing sector.
U.S. manufacturing contracted last month, according to the Institute for Supply Management. Its index fell to 49.1 from 51.2 in July; anything below 50 is considered a sign of contraction.
Farmers hurt by the loss of markets for corn, soybeans and pork are growing more pessimistic about a good outcome from the trade war, according to surveys. The administration has responded with $28 billion worth of bailouts for farmers and ranchers in the past two years.
The president said this week that he doesn’t want to include the massive Chinese technology company Huawei in any new talks, citing national security concerns. The U.S. has blacklisted Huawei from doing business with U.S. firms.
Beijing is balking at U.S. pressure to roll back plans for government-led creation of global competitors in robotics and other industries.
The U.S., Europe, Japan and other trading partners say those plans violate China’s market-opening commitments and are based on stealing or pressuring companies to hand over technology.
In their latest escalation, Washington imposed 15% tariffs on $112 billion of Chinese imports Sunday and is planning to hit another $160 billion on Dec. 15 — moves that would extend penalties to almost everything the United States buys from China. Beijing responded by imposing duties of 10% and 5% on a range of American imports.
U.S. tariffs of 25% imposed previously on $250 billion of Chinese goods are due to rise to 30% on Oct. 1.
China has imposed or announced penalties on a total of about $120 billion of U.S. imports, economists estimate.
Some observers have raised the possibility of the U.S. postponing the Oct. 1 tariff increases as a show of goodwill before the new high-level talks begin.
The Chinese government has agreed to narrow its politically sensitive trade surplus with the U.S. but is reluctant to give up development strategies it sees as a path to prosperity and global influence.
“Logically, it makes sense from economic and political standpoints for both Trump and Xi to put an end to the trade war,” said Daniel Ikenson, director of the center for trade policy studies at the libertarian Cato Institute. “The U.S. manufacturing sector appears to be contracting and signs point to a broadening U.S. economic slowdown … Meanwhile, the trade war is worsening troubles in the Chinese economy.”
Mr. Ikenson said Mr. Xi is getting pushback from other Chinese officials who “are unhappy with the trajectory and tenor of the U.S.-China relationship under his leadership, (believing) that Xi has been unnecessarily provocative.”
China insists that Mr. Trump’s punitive tariffs must be lifted once a deal takes effect. Washington says at least some of the levies must stay to make sure Beijing carries out any promises.
Mr. Trump has warned that if he is reelected, China will face a tougher U.S. negotiating stance.
⦁ This article is based in part on wire service reports.
• Dave Boyer can be reached at dboyer@washingtontimes.com.
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