Chinese and US flags are flown near the Bund, ahead of US traders meeting with their Chinese counterparts for talks in Shanghai, China July 30, 2019.
Aly Song | Reuters
China said on Saturday it had forced the United States to cut taxes in talks between the country’s trade leaders which Washington saw as a test of bilateral cooperation between the world’s largest economies.
Negotiations between US Trade Representative Katherine Tai and China’s Chinese counterpart Liu Following Tai’s announcement on Monday that he will seek “honest” talks and hold China to its ties under the “Phase 1” trade agreement reached by former President Donald Trump.
“The Chinese side has discussed the abolition of taxes and sanctions, and has clarified its position on China’s economic development and industrialization agenda,” China’s Xinhua news agency said after talks, held Friday in Washington.
Tai has been keen to use the telephone, the second between the two, to try to ensure that bilateral relations can resolve US grievances over Beijing trade and support practices, said a USUSTR official.
“Thai Ambassador and Vice President Liu reviewed the implementation of the US-China Economic and Trade Agreement and agreed that the two sides would consider the issues at hand,” USTR said in a statement.
Xinhua said the two sides “expressed their concerns and agreed to resolve each other’s serious problems through dialogue.”
“Both sides agree to continue communicating in a manner that is mutually respectful, and to create conditions for the promotion of economic and trade relations between the two countries and to restore the country’s economy.” said.
US calls China ‘heavy country-centric route’
Shortly before the summons, the OSTR chief said Tai would give Liu a review of China’s performance in making the Phase 1 agreement, including the promised purchase of US failing assets.
He also raised concerns about Chinese “non-market” economic practices.
“We know that Beijing is continuing to make it clear that it is doubling its administrative capacity and is opposed to solving our problems,” the official said. “So our ultimate goal will continue to build resilience and competitiveness, diversify markets, and reduce Beijing’s harmful effects.”
The official said Tai would meet China in the future “about how China responds to tonight’s call” and declined to discuss the next steps, but added that Tai would not seek bilateral trade talks with Beijing over government business and other status issues.
The Phase 1 agreement in January eased the ongoing tax struggle between the two largest economies. It focused on China’s commitment to boost US farm purchases and manufactured goods, energy and services by $ 200 billion over two years, as well as to increase security of rights, demonstrations and other forms of wealth.
President Trump envisaged talks in Part Two to address more complex issues such as support for state-owned enterprises and China’s industrial plans.
Asked if the United States is looking for an alternative to “Section 301” that could result in higher taxes on Chinese goods if the agreement with Beijing fails, the official said the United States would use “the full amount of resources we have to protect American workers, farmers and businesses from acting improperly.”
Tai, a well-known Mandarin spokeswoman and daughter of foreign nationals from Taiwan, thinks the call is “a test of whether this type of cooperation helps preserve the resources we are looking for, and we are going with the hope that China will respond positively,” said a USRR official.