US, China to launch trade talks, China hawk Navarro’s role reduced

WASHINGTON: The United States and China launch trade talks on Thursday in a bid to avert a damaging tariff war, with the White House’s harshest China critic relegated to a supporting role, senior Trump administration officials said.

Peter Navarro, the White House trade and manufacturing adviser, will not be a principal player on the US side, two officials said.

Instead, US Treasury Secretary Steven Mnuchin, Commerce Secretary Wilbur Ross and US Trade Representative Robert Lighthizer will lead the American delegation in talks with Chinese Vice Premier Liu He, the top economic adviser to President Xi Jinping.

Navarro, author of the book ‘Death by China,’ has been the loudest ‘nationalist’ voice on trade policy in the administration and a major advocate for punitive tariffs on Chinese goods to try to force Beijing to change its trade practices.

He attended an initial round of talks two weeks ago in Beijing that amounted to presentations of lengthy trade demands by each side.

Navarro’s shift away from a lead role in the talks comes amid a growing rift over trade policy with Mnuchin, who has favoured more achievable deals to open China’s economy to US firms and ease tariff threats.

Navarro and Mnuchin had an angry exchange on the Beijing trip and ties were so strained some participants openly wondered how they would get along on the same plane on the long US-China flights, a person familiar with the episode said.

The Washington talks will start as USTR finishes up public hearings on the first batch of US tariffs on US$50 billion worth of Chinese goods proposed as punishment for alleged violations of US intellectual rights.

The tariffs, which target Chinese electrical and machinery part, autos and flat-screen television sets, could take effect in early June, and may be followed by an additional round targeting US$100 billion worth of Chinese goods yet to be identified.

China has promised to retaliate in equal measure, targeting US soybeans, aircraft, autos and other goods for additional tariffs, causing US farm commodity prices to fall.

Liu, who is China’s top economic official, told US lawmakers on Wednesday that he would work hard to address the US-China trade imbalance and other problems with the trading relationship.

Members of the trade- and tax-focused US House of Representatives’ Ways and Means Committee said they told Liu that he needed to address US concerns about intellectual property theft, forced technology transfers, and barriers to investment in China and US agricultural exports.

Representative Kevin Brady, the committee’s Republican chairman, said he urged Liu to keep working with the administration toward a solution.

“He recognizes there are problems in this trade relationship,” Brady said of Liu after the meeting. “And his hope for this trip was to begin to address the trade imbalance, increasing demand of Chinese consumers for US products, as well as to begin to take steps on the structural reforms.”

Liu left the meeting with several other Chinese officials without speaking to reporters.

Senator Orrin Hatch, Republican chairman of the Senate Finance Committee, said after a meeting with Liu that he doubted the Chinese would agree to steps that would warrant backing off the tariff threat. — Reuters

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