US-China trade war: both sides cling to phase one deal as wider relationship crumbles

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The phase one trade deal’s lead negotiators, US Treasury Secretary Steven Mnuchin, US Trade Representative Robert Lighthizer and Chinese Vice-Premier Liu He, spoke by phone on Tuesday. Photo: AP

Published: 11:00pm, 25 Aug 2020Updated: 9:46pm, 1 Sep 2020

Polite boilerplate statements from both sides marked the first high-level trade talks between the United States and China since the signing of the phase one trade deal in January, reiterating the fact that trade is the only remaining area of constructive dialogue in the crumbling superpower relationship.

Lead negotiators Vice-Premier Liu He on the Chinese side, along with Treasury Secretary Steven Mnuchin and US Trade Representative (USTR) Robert Lighthizer on the American side, spoke in a delayed telephone call on Tuesday morning Chinese time.

A statement from the Office of the USTR – which initially misspelled Liu He’s name – said that “both sides see progress and are committed to taking the steps necessary to ensure the success of the agreement”.

On the Chinese side, a short statement said negotiators had “conducted a constructive dialogue on such issues as strengthening bilateral coordination of macroeconomic policies and the implementation” of the trade deal.

A Beijing adviser downplayed China’s raising the issue of macroeconomic policy coordination – which did not appear in the US statement afterward – as “empty talk”, because “economic coordination is not within USTR’s remit”, the person said, speaking on condition of anonymity.

These statements were restrained compared with the rancorous geopolitical environment into which they were released.