China offer unlikely to spur major trade war breakthrough, says senior US official

A staff member watches over a truck at a port in Qingdao, in east China's Shandong province. PHOTO: AFP

WASHINGTON (REUTERS) - China's written response to US demands for trade reforms is unlikely to trigger a breakthrough at talks between Presidents Donald Trump and Xi Jinping later this month, a senior Trump administration official told Reuters on Thursday (Nov 15).

Beijing provided the Trump administration with its document earlier this week, responding to a months-long request from US officials to jumpstart trade talks, Reuters reported on Wednesday.

It was a good sign that Beijing had put something in writing after months of declining to do so, the official said, speaking to Reuters on condition of anonymity.

But the offer should be viewed with scepticism, the official said, in part because China has previously made promises on economic and trade reforms that it had not fulfilled.

China has previously offered to do more to loosen restrictions on the percentage of Chinese companies that US firms are permitted to own, for example, but then had not followed up that pledge by providing licenses for US companies.

US officials were still studying the list, which the official said was received on Monday night.

The Chinese document included 142 items divided into three categories: issues the Chinese are willing to negotiate for further action, issues they are already working on and issues they consider off limits, the official said.

With much work to do to sort through the list and the Group of 20 summit only two weeks away, the official played down expectations of a major breakthrough on substantiative issues on trade during talks between Trump and Xi at the gathering of world leaders in Argentina at the end of November.

A best-case scenario could be that the two leaders agreed to keep talking and declare the issue is moving in a better direction, the official said.

It was too early to tell whether China's offer would be sufficient to preclude an increase in US tariffs at the start of 2019, he said.

Trump has imposed tariffs on US$250 billion (S$345 billion) of Chinese imports to force concessions from Beijing on the list of demands that would change the terms of trade between the two countries. China has responded with import tariffs on US goods.

The tariff rate on US$200 billion in Chinese goods is set to increase to 25 per cent from 10 per cent on Jan 1.

Trump has also threatened to impose tariffs on all remaining Chinese imports, about US$267 billion worth, if Beijing fails to address US demands.

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