US-China relations: economic chief Liu He, Treasury Secretary Janet Yellen hold ‘pragmatic, frank’ exchange

  • Chinese Vice-Premier Liu He held a virtual conference with US Treasury Secretary Janet Yellen on Tuesday, their first call since October
  • One of the ‘issues of concern’ raised by the US included the impact of Russia’s war against Ukraine on the global economy

Top economic officials from China and the United States held a long-awaited meeting on Tuesday, with the Biden administration reportedly mulling the rolling back of tariffs on Chinese products to help curb America’s 40-year-high inflation.

During the virtual conference at the request of the United States, Chinese Vice-Premier Liu He had a “pragmatic and frank” exchange with US Treasury Secretary Janet Yellen on economic and tariff issues, the official Xinhua News Agency reported.

It marked their first call since October.

“The two sides had a pragmatic and frank exchange of views on such issues as the macroeconomic situation and the stability of the global industrial chain and supply chain. The exchanges were constructive,” Xinhua reported.

“The two sides believe that the current world economy is facing severe challenges, and it is of great significance to strengthen the communication and coordination of China-US macro policies. And jointly maintaining the stability of the global industrial chain supply chain is beneficial to China and the US and the world as a whole.

“The Chinese side has expressed its concern about the US lifting of tariffs and sanctions imposed on China, and the fair treatment of Chinese enterprises. The two sides agreed to maintain dialogue and communication.”

The phase-one trade deal between China and the US expired in December, with tariffs imposed by the Trump administration remaining on more than US$300 billion worth of Chinese imports.

“During the candid and substantive conversation, they discussed macroeconomic and financial developments in the United States and China, the global economic outlook amid rising commodity prices and food security challenges,” said a US Department of the Treasury statement about the talks, which it referred to as “part of the administration’s ongoing efforts to maintain open lines of communication”.

“Secretary Yellen frankly raised issues of concern, including the impact of Russia’s war against Ukraine on the global economy, and unfair, non-market [Chinese] economic practices. Secretary Yellen noted that she looks forward to future discussions with Vice-Premier Liu.”

In May, the Office of the US Trade Representative (USTR) told US businesses that it had begun a statutory process that could ultimately end up removing tariffs on Chinese goods.

The notification, part of a legal requirement to review the tariffs four years after they were first put into place, puts the burden on US businesses benefiting from those tariffs to speak out and say whether they want the policy to continue.

Under the policy, businesses have until Wednesday – the four-year anniversary of the first tariffs – to notify the USTR that they want them kept in place. That would then trigger a review from the trade office, which would include a period for the public to provide comments.

Dow Jones reported on Monday that US President Joe Biden could announce his decision to roll back some tariffs on Chinese imports as soon as this week.

Authors: Frank Tang, Orange Wang, SCMP

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