China reveals that high-level trade war dialogue with US goes on as negotiators schedule January meeting

China and the United States held a vice-ministerial dialogue on trade and economic issues as part of efforts to de-escalate their trade war.

On Wednesday, the Ministry of Commerce said officials from both sides exchanged views on matters of mutual concern.

The ministry’s announcement came after US Treasury Secretary Steven Mnuchin said negotiators charged with hammering out a broader truce in the China-US trade war will meet in January.

Both sides were now focused on trying “to document an agreement” by March 1, when the 90-day truce in the trade war ends, he said.

Mnuchin said neither he nor US President Donald Trump were aware of the arrest of Huawei Technologies chief financial officer Sabrina Meng Wanzhou in Canada when they met Chinese President Xi Jinping on December 1.

Mnuchin poured cold water on Trump’s declaration last week that he would be willing to intervene on Huawei’s behalf if it was required to help reach a trade deal between China and the US.

“We’ve been very clear and China understands that these are separate tracks,” he said.

Reducing the trade deficit with China remained a priority for Trump, but the administration understood it would take time and was also focused on securing structural changes in the Chinese economy that would help balance trade, Mnuchin said.

The US’s monthly trade deficit in goods with China hit a record high in October and is on track to have expanded through the first two years of the Trump presidency.

“I don’t think that we’d expect that overnight,’’ Mnuchin said of the prospect of eliminating the trade deficit with China. But the US and China had agreed on the need for more balanced trade and that would set the stage for meaningful change, he said.

US and China trade negotiators will sit down together in January: US Treasury Secretary Steven Mnuchin

Washington and Beijing have been locked in a trade war since July 6, when they each applied tariffs to imports of the other’s goods. But on December 1, the day after the presidents met at the G20 summit in Argentina, they agreed to a 90-day truce in their dispute.

The US Soybean Export Council said Chinese importers returned to the US soy market on Tuesday for their second round of purchases since the two nations agreed to the truce. The deals struck were evidence that Beijing is trying to make good on its pledge to buy more US agricultural goods.

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China last year imported 31.7 million tonnes of soybeans from the US, nearly 60 per cent of the country’s export shipments, in deals valued at US$12.25 billion.

Talks between officials from the two sides are necessary to resolve issues such as forced technology transfers and cyber intrusion. If they fail to reach agreement by March, the US could extend its tariffs to all goods it buys from China.

Observers said earlier that 90 days was not enough time to tackle all of the issues involved in the trade dispute, but sufficient to create a framework for future talks.

Additional reporting by Bloomberg and Reuters