China’s top diplomat in the United States has called on Washington to stop politicising trade issues, and to remove punitive tariffs imposed on Chinese products. In response, analysts suggested that a partial removal of tariffs may be likely, but any such actions would be primarily in the US’ domestic interests. And they also cautioned against expecting a substantial improvement in overall bilateral ties. In an interview with Forbes published on Thursday, ambassador Qin Gang said a “political virus” in the US, such as abuses of national security, is hurting bilateral economic ties, as more than 1,000 Chinese companies have been put on lists of trade restrictions and sanctions by the US. “The lists are getting longer and longer, and day by day,” said Qin, who became China’s envoy in the US last summer . But he also played up the prospects of trade cooperation between the two countries, which have seen heightened rivalry on almost all fronts, including hi-tech, security, space and ideology, in recent years. He said that both countries have made “remarkable achievements” in trade over the past few decades, and that trade between the two countries “performed well” last year, despite the pandemic. “We are natural partners because our economies are highly complementary,” he said. “We are very optimistic about the potentials and opportunities between our two countries, but at the same time, we are mindful of more difficulties and challenges in our trade and business relations.” His comments came amid growing discussions in Washington about lowering tariffs to help ease the decades-high inflation in the US. US headline inflation came in at 8.5 per cent in March, year on year – a level and pace not seen since December 1981. US Treasury Secretary Janet Yellen noted in April that lowering tariffs on Chinese products was “ worth considering ”. The US Trade Representative Office also announced earlier this week that it would launch a statutory four-year review of the tariffs that were imposed on Chinese products in 2018 by the former administration of Donald Trump. US trade office says it has begun process on whether to lift Chinese tariffs The first review would cover US$50 billion worth of Chinese products from July, when the tariffs will expire. The Peterson Institute for International Economics (PIIE) said in a study in March that removing the Trump-era tariffs, including those on Chinese products, would reduce inflation by 1.3 percentage points. State media Xinhua said in an interview with PIIE economist Gary Hufbauer that lifting tariffs on Chinese products would directly lead to a 0.3 percentage point reduction in the consumer price index. Qin reiterated China’s long-standing position against tariffs and its calls for dialogue to resolve trade conflicts. “The tariffs are bad. It hurts China and the US,” Qin said. “The tariff war hasn’t reduced the trade deficit in the US, and it [has cost] US families US$1,300 each year since the tariffs took effect in 2018.” China and the US should cooperate to take a leading role in the global economic recovery, and doing so requires a “good environment”. Chen Fengying, a senior fellow at the China Institutes of Contemporary International Relations, said most of the products under review are labour-intensive goods, some of which have already been put on the tariff-exemption list. “We need to see the results of the review and whether it will cover strategic products,” Chen said. “The Biden administration is focusing on tech competition with China, rather than trade. It is aiming to seek a coalition on chips, and to build up the Indo-Pacific Economic Framework to set rules and standards in containing China,” she said. “That is the Achilles’ heel for China. Washington knows it, and it has refrained from dialogue with China.” What is IPEF, the new US-led economic framework for the Asia-Pacific? Everbright Securities projected that overall bilateral relations between the countries are unlikely to improve greatly in the run-up to the US midterm elections in November, though the US may lift tariffs on more Chinese goods. “Democrats and Republicans will pressure China on human rights, ideology, issues over Xinjiang and Taiwan prior to the midterm election. They will intensify the anti-China rhetoric to attract hawkish voters,” the securities brokerage said in a research note on Thursday. Zhang Monan, a researcher with the China Centre for International Economic Exchanges, said in late April that the US had adopted a new trade strategy with “selective decoupling” and “precise strikes” on China. She also said that the Biden administration has sought to contain China on industrial subsidies, digital trade and competition policies, while noting that the window opportunity for effective engagement is disappearing.