THE PHRASES USED by both sides after the talks held today by top economic officials from China and the United States describe a bluntly transactional and distrusting relationship.
The virtual talks, led by Vice Premier Liu He and US Treasury Secretary Janet Yellen, covered the well-rehearsed litany of US tariffs and sanctions on China, what Beijing holds is the unfair treatment of Chinese companies by the United States, what Washington describes as China’s unfair and non-market practices and the war in Ukraine.
At least, the two sides agreed to ‘maintain dialogue and communication’, according to China’s readout, while Yellen ‘noted’ that she looks forward to future discussion with Liu. In the context of the low ebb of China-US relations, that represents progress of a sort between two countries that see each other as their primary geostrategic rival.
Our man in Washington tells us that US President Joe Biden is leaning towards lifting some of the Trump-era tariffs. However, his administration remains divided over the issue, the China hawks not wanting to yield any possible leverage. Undoubtedly, some of the tariffs make little strategic sense, and easing them would help battle domestic US inflation, albeit on the margins.
Biden will have to make up his mind soon. The tariffs start to expire this month, although the administration said in May that it had initiated the review process needed to roll them over.
His decision may come after the administration’s debriefing on today’s talks.
Any rollback of the tariffs is likely to be accompanied by a new US investigation into China’s industrial subsidies, our man in Washington says. That could lead to more duties in strategic areas like technology.