‘US-China pact in the interest of both countries’ - GulfToday

‘US-China pact in the interest of both countries’

Xi and Trump-750

Xi Jinping with Donald Trump

WASHINGTON: The top US trade negotiator said on Wednesday it is in the interests of China and the United States to have a successful trade pact and he expects to meet with a senior Chinese official ahead of next week’s G20 summit in Japan where President Donald Trump and Chinese President Xi Jinping are set to confer.

US Trade Representative Robert Lighthizer, testifying at a hearing of the House of Representatives Ways and Means Committee, said he and US Treasury Secretary Steven Mnuchin will meet with Liu He, China’s vice premier and chief negotiator in the US talks, ahead of the G20 summit in Japan.

The United States and China, the world’s two largest economies, are in the middle of a costly trade dispute that has put pressure on financial markets and damaged the global economy.

Talks to reach a broad deal broke down last month after US officials accused China of backing away from agreed commitments. Interaction since then has been limited, and Trump has threatened to put more tariffs on Chinese products in an escalation that businesses in both countries want to avoid.

It is unclear when the US-China trade negotiations will restart but the United States is “certainly willing to engage” with China in the discussions, Lighthizer told the committee.

“We have a very unbalanced relationship with China and we have one that risks literally the jobs of the future,” Lighthizer said.

“I think it’s in the interests of both China and the United States to have some kind of successful agreement. The president (Trump) has said he definitely wants an agreement if we can get a great agreement for America,” Lighthizer added.

China said on Wednesday positive outcomes were possible in trade negotiations with the United States, after Trump and Xi agreed to revive their troubled talks at the G20 meeting.

Trump said on Tuesday he would meet Xi at the G20 summit in Osaka. China, which previously declined to say whether the two leaders would get together, confirmed the meeting. The two leaders spoke by telephone on Tuesday.

News that the negotiations were back on the agenda boosted China’s stock markets, with the blue-chip CSI300 index ending 1.3% higher while the Shanghai Composite Index rose 1.0%.

US stocks edged higher at their opening but traders were focused on the Federal Reserve’s policy statement that is expected to open the door to future interest rate cuts.

Speaking at a daily news briefing, China’s foreign ministry spokesman Lu Kang said it was important to find a solution that was acceptable to both sides.

“I’m not getting ahead of myself, but communication over four decades shows it is possible to achieve positive outcomes,” Lu said.

“The two leaders will talk about whatever they want,” Lu added. “A deal is not only in the interests of the two peoples but meets the aspirations of the whole world.” There was fresh evidence on Wednesday of the disruption in supply chains arising from the US-Chinese trade tensions.

Apple Inc has asked its major suppliers to assess the cost implications of moving 15% to 30% of their production capacity from China to Southeast Asia as it prepares for a restructuring of its supply chain, according to a Nikkei Asian Review report on Wednesday.

Apple’s request was a result of the extended Sino-U.S. trade dispute, but a trade resolution will not lead to a change in the company’s decision, Nikkei said, citing multiple sources. The iPhone maker has decided the risks of depending heavily on manufacturing in China are too great and even rising, Nikkei said.

Key iPhone assemblers Foxconn, Pegatron Corp, Wistron Corp, major MacBook maker Quanta Computer Inc, iPad maker Compal Electronics Inc, and AirPods makers Inventec Corp, Luxshare-ICT and Goertek have been asked to evaluate options outside of China, Nikkei reported.  The countries being considered include Mexico, India, Vietnam, Indonesia and Malaysia. India and Vietnam are among the favorites for smartphones, Nikkei said.

In another development, the United States has fined several companies for exporting goods via a Chinese-owned special economic zone in Cambodia in a bid to dodge Trump’s tariffs on Chinese imports, Arend Zwartjes, a US Embassy spokesman in Phnom Penh, told Reuters.

In a speech on Tuesday night in Florida formally launching his 2020 re-election campaign, Trump said he had taken “historic action to confront China’s chronic trading abuses.” “It should have been done a long time ago, but the days of stealing American jobs and American companies, American ideas and wealth - those days are over,” Trump told the packed rally in Orlando.

Reuters