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Chinese stocks, yuan relieved after US offers exit ramp from tariffs on $200 billion in goods

Matt Linden

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WASHINGTON/BEIJING — China said on Thursday that it welcomed an invitation by the United States to hold a new round of trade talks, as Washington prepares to further escalate the US-China trade war with tariffs on $200 billion worth of Chinese goods.

The Trump administration had invited Chinese officials to restart trade talks, the White House’s top economic adviser said on Wednesday, news that gave a lift to Asian stocks, including Chinese shares and the yuan currency.

The Chinese Foreign Ministry spokesman Geng Shuang told reporters that China welcomed the invitation and that the two countries were discussing the details.

“China has always held that an escalation of the trade conflict is not in anyone’s interests,” he said. “In fact, from last month’s preliminary talks in Washington, the two sides’ trade-talk teams have maintained various forms of contact and held discussions on the concerns of each side.”

Larry Kudlow, who heads the White House Economic Council, told Fox Business Network that US Treasury Secretary Steven Mnuchin had sent an invitation to senior Chinese officials, but he declined to provide further details.

“There’s some discussions and information that we received that the Chinese government — the top of the Chinese government — wished to pursue talks,” Kudlow said. “And so, Secretary Mnuchin, who is the team leader with China, has apparently issued an invitation.”

Two people familiar with the effort said Mnuchin’s invitation was sent to his Chinese counterparts, including Vice Premier Liu He, the top economic adviser to Chinese President Xi Jinping, for talks in coming weeks, with the time and the venue still to be agreed.

A meeting among Cabinet-level officials could ease market worries over the escalating tariff war that threatens to engulf all trade between the world’s two largest economies and raise costs for companies and consumers.

“I think most of us think it’s better to talk than not to talk, and I think the Chinese government is willing to talk,” Kudlow earlier told reporters outside the White House. But Kudlow was noncommittal over the chances of a breakthrough.

“I guarantee nothing,” he said.

The last talks, between mid-level US and Chinese officials August 22-23, failed to reach any agreement.

Raise or fold

The invitation, first reported by The Wall Street Journal, comes amid a swelling chorus of opposition to tariffs from Western business circles.

On Thursday, the US business lobbies AmCham China and AmCham Shanghai published a joint survey showing that the negative impact on US companies in China of tit-for-tat tariffs Washington and Beijing have imposed on each other was “clear and far reaching.”

More than 60% of US companies polled said the US tariffs were already affecting their business operations, while a similar percentage said Chinese duties on US goods were having an impact on business.

AmCham China and AmCham Shanghai urged the Trump administration to rethink its approach.

The European Union Chamber of Commerce in China released its own survey Thursday saying the tariffs were causing “significant disruptions” to global supply chains and “seriously impacting” non-Chinese and non-American companies.

A day earlier, more than 60 US industry groups launched a coalition, Americans for Free Trade, to take the fight against the tariffs public.

Scott Kennedy, the deputy director of China studies at the Center for Strategic and International Studies in Washington, expected China to enter the talks cautiously, doubting whether either side was ready to give much ground.

“My guess is that they won’t receive an enthusiastic response from the Chinese, because the Chinese probably just don’t think that the Trump administration itself necessarily wants a deal or is willing to offer anything,” Kennedy said during a research trip to China.

“China’s economy has slowed a tiny amount, and it certainly has financial anxieties, but it is nowhere near any kind of tipping point. I don’t see the Chinese running to the table to up their offer in any appreciable way.”

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