WASHINGTON: China has invited U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin to Beijing to continue trade negotiations, White House economic adviser Larry Kudlow said Sunday.:
The U.S. officials hadn’t firmed up plans to travel, Mr. Kudlow said in an interview on “Fox News Sunday.” President Trump and Chinese President Xi Jinping are likely to talk directly at a G-20 meeting in Japan at the end of next month, Mr. Kudlow said.
The two countries have been negotiating a trade plan for more than five months, and the latest round of talks reached an impasse Friday in Washington.
The U.S. raised punitive tariffs to 25%, from 10%, on $200 billion of Chinese imports, starting Friday. Mr. Trump also ordered staff to begin the paperwork to impose levies on the more than $300 billion of everything else China sells to the U.S.
Mr. Kudlow acknowledged Sunday that Americans, not the Chinese, pay the tariffs, contradicting Mr. Trump’s assertion that China pays.
“In fact, both sides will pay,” Mr. Kudlow said. He responded “fair enough” to anchor Chris Wallace’s statement that U.S. importers and companies pay what is in effect a tax, often one that is passed along to American consumers. But Mr. Kudlow added that the Chinese will suffer gross-domestic-product losses.
Mr. Kudlow said that the process to implement additional tariffs could take months because it includes hearings and a 60-day public comment period.
So far, China hasn’t responded with retaliatory measures, unlike in past rounds of escalation when it raised duties on U.S. goods.
China has more limited tariff options, since it imports fewer products from the U.S. than the other way around, and the Chinese leadership is also constrained by an economy that is in a shaky recovery from a sharp slowdown.
The tariff escalation is worrisome for Chinese officials, who are watching potential ripple effects, from weakening of the currency to crimping future foreign investment. Raising existing tariffs or imposing new ones could hit products China’s economy needs, like semiconductors, pork, oil and passenger jets.
China’s lead negotiator, Vice Premier Liu He, told Chinese reporters before leaving Washington that the domestic economy is in better shape than last year, with sufficient policy tools and business confidence to withstand pressure and “maintain smooth, healthy development.”
Mr. Kudlow, in his “Fox News Sunday” interview, said the U.S. economy also is strong enough to endure prolonged trade talks.
“The economic costs are de minimis,” he said. “The potential economic gains of a good deal that opens up China and makes them legal trading partners, those gains are huge. So that’s a cost-benefit analysis that I really like.” - WSJ
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