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China-US relations

US officials steel for trade talks with Xi’s economic confidant as Trump mulls tariffs

Steel and aluminium duties are on the table in Washington as Liu He and Robert Lighthizer prepare to tackle market disputes

PUBLISHED : Saturday, 24 February, 2018, 12:51pm
UPDATED : Friday, 23 March, 2018, 12:05pm

Senior US officials will discuss trade disputes next week with a top Chinese economic official when he visits Washington, a senior US official said on Friday as US President Donald Trump considers new tariffs on steel imports.

The talks would be led by Trump’s trade envoy, Robert Lighthizer, who would meet senior Chinese economic adviser Liu He, the official said.

US officials say they do not expect a breakthrough in the discussions.

Trump has long sought a way to a more balanced trade relationship with China and threatened to impose a big “fine” against China to protect American intellectual property. The US official said Trump had been discussing imposing a global tariff on imports of steel from China and other countries.

China’s top economic aide Liu He heading to US in bid to defuse trade tensions

A source close to the White House said he had expressed interest in imposing a tariff on steel imports of at least 24 per cent, but a White House spokesman said no final decision had been made.

The prospect of a global tariff sent steel shares rising after hours with United States Steel and AK Steel up more than 3 per cent.

The Commerce Department on February 16 recommended that Trump impose stiff curbs on steel imports from China and other countries and offered the president several options, ranging from global and country-specific tariffs to broad import quotas.

A blanket tariff on steel would cover every steel and aluminium product entering the American market from China, the world’s biggest steel producer.

“No final decisions have been made. As with every decision he makes, the security of the American people and the American economy will be the president’s primary concerns while he considers his potential options,” White House spokesman Raj Shah said.

“President Trump is committed to achieving fair and reciprocal trade relationships that protect the American worker and grow our economy.”

During a joint press conference with visiting Australian Prime Minister Malcolm Turnbull, Donald Trump papered over superpower rivalries with China on Friday, said trade was a major problem of the bilateral relations.

“I don’t think we’ve ever had a better relationship with China than we do right now,” Trump said, using trademark hyperbole.

“Other than the fact that they’ve been killing us on trade for the last long period of time. Killing us.”

Trump regularly claims that his presidency has led to the “best ever” relationship with countries from Australia to Britain to China.

Trump also boasted about his relationship with Chinese leader Xi Jinping.

“My personal relationship with President Xi is quite extraordinary. He is somebody that I like. I think he likes me,” Trump said.

“With that being said, he likes China and I like the United States ... as much as I like and respect President Xi, we have to straighten out the trade imbalance. It’s too much.”

Liu, a Harvard-trained economist and confidant of Chinese President Xi Jinping, has emerged as the front-runner to be the next governor of China’s central bank, according to sources with knowledge of the situation. Liu is the top adviser to Xi on economic policy and is also expected to become vice-premier overseeing the Chinese economy.

Trump official says US must do more to confront China on trade

China has not officially confirmed the trip.

When asked in Beijing on Friday if Liu was going, Chinese foreign ministry spokesman Geng Shuang would only say that the two countries had frequent exchanges of officials at various levels.

“If there is important news, China will issue it in a timely manner,” Geng said.

China has expressed concerns over excessive protectionism in the US steel sector and urged restraint. It has also said it will oppose any “unfair and unreasonable” trade measures by countries such as the US.

American steel companies have pressed the administration to impose trade measures to curb excess steel capacity and surging imports they say are undermining the US industry.

Exports from China to the US reached 1.18 million tonnes last year. China produces a total of 800 million tonnes of steel each year, equal to about half of global output.

In a meeting with a bipartisan group of US senators and representatives at the White House earlier this month, Trump signalled he would take at least some action to restrict imports of both steel and aluminium.

Additional reporting by Agence France-Presse