Please use the sharing tools found via the email icon at the top of articles. Copying articles to share with others is a breach of FT.com T&Cs and Copyright Policy. Email licensing@ft.com to buy additional rights. Subscribers may share up to 10 or 20 articles per month using
China and the US ramped up talks on steel amid threats from President Donald Trump to impose new curbs on imports of the metal in the name of US national security.
The intensified deliberations are part of the “Comprehensive Economic Dialogue” between Mr Trump’s team and their Chinese counterparts in Washington, which began this week.
The first round of those broader discussions was expected to yield little in terms of concrete announcements. But there were signs that the Trump administration’s threat to invoke a Cold War-era law and impose either tariffs or quotas on steel imports was leading at least to more substantive discussions on alleged dumping of Chinese steel on world markets.
A meeting on Tuesday between US Commerce Secretary Wilbur Ross, Treasury Secretary Steven Mnuchin and China’s vice-premier, Wang Yang, on steel yielded what people close to the situation said were productive discussions. The talks ran long, with aides shooed away when they sought to keep the ministers on schedule and told that these were the most important negotiations of the week, according to people briefed on the discussions.
The Trump administration has threatened to use the broad powers it has under the little used “Section 232” of a 1962 trade act to impose restrictions on imports that threaten US national security.
The potential invocation of “national security” is seen as a nuclear option by trade experts. Business groups have been lobbying friendly voices in the administration such as Gary Cohn, Mr Trump’s top economic adviser, to try to limit the potential damage.
Please use the sharing tools found via the email icon at the top of articles. Copying articles to share with others is a breach of FT.com T&Cs and Copyright Policy. Email licensing@ft.com to buy additional rights. Subscribers may share up to 10 or 20 articles per month using the gift article service. More information can be found at https://www.ft.com/tour.
https://www.ft.com/content/3b7e025c-6ca1-11e7-bfeb-33fe0c5b7eaa
The fear is that any such move would open the door to retaliation from US trading partners such as China, the EU, Japan, and South Korea and set off a trade war. There are concerns it could lead other countries including China to also invoke a national security exception in global trading rules and thus open a protectionist Pandora’s Box that would undermine the current system built around the World Trade Organisation.
A deal between the US and China to avoid any such move by the Trump administration or at least delay it would therefore be welcomed by business and America’s trading partners, many of whom fear they would suffer from US punitive action.
Chad Bown of the Peterson Institute for International Economics, a think-tank, said that any discussions about steel were a good sign as Washington’s threat to invoke national security risked turning it into the trade aggressor in the eyes of the rest of the world.
“The concern about tariffs or quotas under the national security law is it takes the worlds policy focus off China and its over-capacity problem and turns it on to the Trump problem — which is tariffs and protectionism,” Mr Bown said.
Mr Trump has adopted a much tougher tone on China since arriving in the White House, heralding what could be a fundamental change in the world’s most important bilateral economic relationship.
Mr Ross warned that the Trump administration was seeking a fundamental rebalancing of the relationship.
Please use the sharing tools found via the email icon at the top of articles. Copying articles to share with others is a breach of FT.com T&Cs and Copyright Policy. Email licensing@ft.com to buy additional rights. Subscribers may share up to 10 or 20 articles per month using the gift article service. More information can be found at https://www.ft.com/tour.
https://www.ft.com/content/3b7e025c-6ca1-11e7-bfeb-33fe0c5b7eaa
“China now accounts for nearly 50 per cent of the US goods trade deficit. If this was just a natural product of free market forces we could understand. But it’s not and so it is time to rebalance our trade and investment relationship in a more fair, equitable and reciprocal manner,” he told the meeting.
Mr Wang conceded that discussions with the US had become more difficult, calling the latest talks “an even more daunting task” and warning of the dangers of confrontation.
“We can think like a champion but we don’t need to defeat each other in [tackling] our differences. Pursuing co-operation is the best way forward,” he said.
US-China relations have frayed in recent months as frustration mounts in Washington over Beijing’s inability or refusal to put pressure on North Korea to abandon its missile and nuclear programmes.
Mr Trump put a lot of faith in Chinese president Xi Jinping when the leaders met at Mar-a-Lago in early April, describing his counterpart as a “great guy” who would help him tackle the growing nuclear threat from Pyongyang.
China has taken several steps — including restricting coal imports from North Korea — that US officials have welcomed. But they have also called those efforts “uneven”.
Tensions have also grown on the military front as the US has stepped up maritime and aerial activities aimed at contesting Chinese claims to disputed waters in the South China Sea.
WeChat