News of the telephone conversation coincided with an announcement by the Office of the United States Trade Representative (USTR) of a delay in tariffs on a significant portion of Chinese imports including electronic products and other goods.
Chinese experts said the sudden postponing of impending tariffs showed that the maximum pressure tactics of the US are losing their bite when it comes to China.
Chinese Vice Premier Liu He held a phone call with US Trade Representative Robert Lighthizer and US Treasury Secretary Steven Mnuchin on Tuesday, with the Chinese side remaining firm against the US’ pending tariffs on September 1, China’s Ministry of Commerce (MOFCOM) said in a statement posted to its website on Tuesday evening.
They also agreed to hold another telephone talk within the next two weeks.
Commerce Minister Zhong Shan, governor of the People’s Bank of China Yi Gang and vice chairman of the National Development and Reform Commission Ning Jizhe took part in the call.
At the same time, the US delayed imposing a 10 percent tariff on certain goods originating from China, including cell phones and laptops, to December 15, or about four months away, according to a statement posted on its website.
The US is also removing certain products from its list of the $300 billion that had been earmarked for 10 percent tariffs based on health, safety, national security and other factors, read the USTR statement, adding that the exclusion process is also under consideration for products subject to the additional tariff.
These measures are set to greatly reduce the weight of US tariffs, as electronics goods alone account for about $130 billion.
Chinese experts reached by the Global Times on Tuesday night said the latest development showed the US maximum pressure tactic is not working on China, but they said it could pave the way for trade talks scheduled for September. However, they were cautious about the potential for any flip-flopping.
Delaying tariffs showed the US tactic of maximum pressure on China has fallen through, Mei Xinyu, a veteran expert close to the Ministry of Commerce, told the Global Times.
“The US has realized that its maximum pressure strategy to force China back to the negotiating table has not worked as expected. Washington knows that only through talks can the two sides reach a deal,” Wang Jun, chief economist at Zhongyuan Bank, told the Global Times on Tuesday.
Wang said Tuesday’s development is more of a gesture rather than a concession from the US side. He doubted whether the decision would stand, given Washington’s flip-flop approach in trade negotiations.
“Trump is looking for a way out. It also shows that both China and the US are highly dependent on each other, and the practice of imposing tariffs does not necessarily bring China to its knees,” said Liang Qi, a professor from Nankai University.
“We also can see that imposing tariffs may harm the interests of the US, making it hard for Trump’s re-election,” Liang said.
Bai Ming, a research fellow at the Chinese Academy of International Trade and Economic Cooperation said that the tariff increase delay shows the US is not willing to cut off the two countries’ negotiation channels when talks are on the verge of failure.
But Bai warned that it might also be a stalling tactic as the US has found that its extreme pressure on China has not generated the results it had hoped for.
The development lifted the US stockmarket as it took a sharp upward turn on Tuesday.
The Dow Jones Industrial Average was up 1.35 percent and the S&P 500 was up 1.37 percent as of press time on Tuesday.
The Nasdaq Composite was up 1.73 percent.