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US, China hold 'candid' trade talks

October 9, 2021

Beijing is seeking the elimination of US tariffs, while Washington sees the discussions as a test of bilateral engagement between the two major economic powers.

Katherine Tai
Katherine Tai will study China's trade records before deciding next stepsImage: Susan Walsh/REUTERS

China's Vice Premier Liu and US Trade Representative (USTR) Katherine Tai held a virtual meeting on Saturday.   

This was the second consultation between the two chief trade negotiators after relations were severed under former US President Donald Trump. The two last spoke in May.

'Candid and constructive exchanges'

China's Commerce Ministry said the virtual meeting was used to discuss the "phase one" trade deal and address other economic concerns.

Both sides "conducted pragmatic, candid and constructive exchanges," the ministry said in a statement.

Beijing has sought to pressure Washington to cancel trade tariffs and sanctions, according to Xinhua state news agency.

Xinhua reported that both sides "agreed to continue communicating with an equal approach and mutual respect, and to create the conditions for the healthy development of economic and trade relations between the two countries and the recovery of the world economy." 

Biden administration sees China as 'a threat'

Tai intended to use the virtual meeting to test whether a bilateral agreement could address Washington's complaints about Beijing's trade and subsidy practices, a USTR official said.

The USTR said that both negotiators "reviewed implementation of the US-China Economic and Trade Agreement and agreed that the two sides would consult on certain outstanding issues."

The US believes that China has not honored its part of an agreement, signed in 2020, to buy more products from American firms and companies.

Washington and Beijing had signed the so-called "phase one" agreement that put on pause a trade war between two of the world's biggest economies.

Chinese Vice Premier Liu He and former US President Donald Trump sign the 'phase one' trade agreement
Chinese Vice Premier Liu He and former US President Donald Trump had signed the 'phase one' trade agreement Image: AFP/S. Loeb

US trade analysts say China fell short of holding up its end of the 2020 agreement.

Tai, who took office in March 2021, has since been conducting a thorough review of Washington's trade policy.

How are the US-China trade relations?

In May 2021, Tai said that the US faced "very large challenges" regarding trade relations with China. 

China's economy has bounced back from the coronavirus pandemic relatively quickly. Still, it has run into headwinds from large amounts of debt, as well as restrictions on high-tech exports, especially those enacted by the US.

Earlier this week, Tai announced the launch of "a targeted tariff exclusion process." More than a goodwill gesture to China, Tai explained that it was a matter of granting "case-by-case" exemptions for US companies that do not have an alternative source of supply to China. 

Though US President Joe Biden has kept up high tariffs on Chinese goods, his administration has seemed to seek a more conciliatory tone with Beijing than his predecessor.

rm/fb (Reuters, AP)