China scrutinising US proposals for talks to reduce tariffs

Beijing, May 02: China on Friday said it is assessing whether to start trade talks with the US on tariff reductions following recent approaches by Washington, a move that would possibly ease the tit-for-tit tariff war between the world’s two largest economies.

"China is making assessments as the United States has recently reached out to convey messages to China through relevant parties many times, expressing hope to engage in talks with Beijing over tariff issues," the Chinese Commerce Ministry said in a statement here.

The tariff and trade wars were unilaterally initiated by the United States. If the US wants to negotiate, it must demonstrate sincerity, and make preparations and take concrete actions on issues such as correcting its erroneous practices and lifting the unilateral tariffs, the statement by its spokesperson said.

China has noticed the US side constantly talking about adjustments to its tariff measures, it said that "in any potential dialogue or talks, if the United States does not rectify its erroneous unilateral tariff measures, it would demonstrate a complete lack of sincerity and further undermine mutual trust."

Saying one thing while doing another, or even attempting to use talks as a cover for coercion and blackmail, will not work with China, it said.

China at present is the only country the US tariffs have come into effect while the American President Donald Trump paused reciprocal levies against a host of other counters, including India and the EU, isolating Beijing, which for its part went ahead with tit for tat tariff war with Washington.

Trump slapped 145 per cent tariffs on Chinese exports. Later, the White House said tariffs on Chinese goods amounted to 245 per cent.

Beijing retaliated by imposing 125 per cent levies on US exports.

China has been denying any talks with the US on tariffs while Trump said talks were on and Chinese President Xi Jinping spoke to him.

The Chinese Foreign Ministry denied any such talks between the two Presidents.

China’s softening stand on the tariffs came amid reports that imported goods from China valued at USD 800 or less sent through the postal network began to be subjected to a duty of either 90 per cent of their value or USD 75 per item – with that to increase to USD 150 per item after June 1, the Hong Kong based South China Morning Post reported on Friday.

Small parcels shipped via e-commerce companies have become a key engine of China’s export growth in the past few years, filling the void left by dwindling wholesale orders from the US due to previous tariffs.

Also according to media reports a number of ships carrying goods to the US started to return back as the new tariffs came into effect.

For China, at stake is its exports to the US worth USD 439.9 billion last year while US exports to China totalled to USD 143 billion.

China is the only country to have retaliated with tit-for-tat levies. For China, the US is the third largest export market.

Despite China putting a brave front, there is considerable concern here about the impact of Trump's tariffs on China's economy, which is struggling with slowdown due to falling exports, low domestic consumption and collapse of the housing market.

The US-China trade war had the trappings of a spill over affect against the rest of the countries as China on April 21 threatened to impose countermeasures on countries seeking to strike trade deals with the US at its expense in order to get American tariff exemptions.

In a pre-emptive move to stall a host of nations with whom China has lucrative trade ties from striking exclusive trade deals with the US to get tariff exemptions, China’s Commerce Ministry warned that Beijing will firmly oppose such agreements.

Beijing’s warning came following reports that US is preparing to pressure other countries to restrict trade ties with China in exchange for tariff exemptions.

Any bilateral trade deals by its major trade partners with the US could seriously impact China’s overseas trade which amounted to USD 3.67 trillion, according to WTO data.

This includes exports last year to its largest trade partners like ASEAN, (USD 586.52 billion), EU (USD 580 billion) Japan (USD 167.12 billion) as per official data.

On April 16, China appointed a new top international negotiator after Trump said the ball is in Beijing's court to work out a deal to end the tariff deadlock.