US-China trade war: visit to Washington by Beijing’s top economic adviser Liu He cancelled, source says

US should ‘correct its mistakes’ on handling of issue, foreign ministry says, as Donald Trump boasts of having ‘more bullets’

PUBLISHED : Saturday, 22 September, 2018, 6:01pm
UPDATED : Saturday, 22 September, 2018, 11:10pm

A planned visit by Chinese Vice-Premier Liu He to the United States for trade talks has been cancelled, a source said on Saturday – confirming a report by the South China Morning Post after Beijing said on Friday that Washington needed to “correct its mistakes” regarding its handling of the ongoing tariff war.

The source, who asked not to be identified, said that a delegation led by Liu was set to hold talks in the US on Monday and Tuesday but that the trip had now been scrapped.

His comments confirmed a Post report published on Tuesday that said the meeting was in jeopardy as the US had failed to meet the precondition of “showing goodwill” with regards to seeking a resolution to the conflict.

Instead, US President Donald Trump on Monday escalated the hostilities by imposing 10 per cent tariffs on almost half of all goods it imports from China.

On Friday, China’s foreign ministry reiterated its view that trust and respect were key to resolving the trade war.

“We have repeatedly stressed that dialogue and negotiations should be built on the basis of equality, integrity and mutual respect, which is the only right way to resolve the economic and trade [dispute] between China and US,” spokesman Geng Shuang told a regular press conference when asked if Liu would travel to the US for talks next week.

“Everything the US does hasn’t given any impression of sincerity and goodwill. We hope that the US side will take measures to correct its mistakes.”

US-China trade war heats up as Beijing hits back at US President Donald Trump’s new tariffs

That seems unlikely in the short term given the comments made by Trump at a rally in Springfield, in the Midwest state of Missouri, on Friday.

“We have far more bullets,” the president said. “We’re going to go US$200 billion and 25 per cent Chinese made goods. And we will come back with more.

“If they retaliate, we have a lot more to come back with. And they want to make a deal, and let’s see if we can make a deal.”

Shi Yinhong, a government adviser and professor of international relations at Renmin University, said the current atmosphere was too heated for negotiations to be effective.

“The announcement of new tariffs on US$200 billion worth of Chinese products by Trump administration indicated that both sides are not calm enough to resume their talks,” he said.

Relations worsened still further on Thursday after Washington imposed sanctions on the Chinese military for buying Russian fighter jets and surface-to-air missile equipment. On Friday, Beijing summoned US ambassador to China Terry Branstad to protest against the sanctions.

“It would be self-deprecating if China sent someone to the US right now, because the situation has totally changed,” Shi said.

“There is no indication that the talks will resume as neither side is showing any sign of softening its words or deeds.”

Trade war thaw? Beijing welcomes surprise US offer to resume high-level talks

Chen Qi, a resident scholar specialising in US-China relations at the Carnegie-Tsinghua Centre for Global Policy, a Beijing-based policy think tank, agreed.

“Last week, it [Beijing] accepted the US’s invitation to talk again but then came the [new] tariffs,” he said.

“Without any concessions it’s difficult for whoever represents China to engage with the US and reach any form of agreement.”

Washington on Monday announced new 10 per cent tariffs on an additional US$200 billion worth of Chinese imports and said the duty could be increased to 25 per cent next year. It had earlier imposed 25 per cent tariffs on about US$50 billion worth of Chinese goods in a move matched by Beijing, which said it would respond to the latest punitive action by slapping levies on a further US$60 billion of American goods.

After the failure of the tit-for-tat approach to dispute resolution, some Chinese analysts have suggested that the time might be ripe for Beijing to consider changing tack.

“We need to start thinking about our reforms again, and to address international concerns and misunderstandings of our policies,” Mao Zhenhua, a co-director of the Institute of Economic Research at Renmin University, told a forum in Beijing.

“We need to re-adjust our foreign relations,” he said. “It is necessary to adjust foreign policy in accordance with the national interest.”

Washington’s ‘hard lines’ are not helping to solve the trade war, Beijing warns

Li Xianyang, a research fellow and director of the National Institute of International Strategy at the Chinese Academy of Social Sciences, an influential government think tank, told the same conference that China-US relations were likely to become increasingly complex.

“No matter which way the trade war ends, the relationship between the US and China is going to be altered,” he said.

“That is to say, China and the US cannot return to the state of cooperation [they had] before the trade war.”

Additional reporting by Amanda Lee