U.S. and Chinese officials will speak on Thursday, potentially paving the way for in-person trade talks to resume, U.S. Treasury Secretary Steven Mnuchin said on Thursday, as the world’s two largest economies seek to end a year-long trade war.

Mnuchin and U.S. Trade Representative Robert Lighthizer will speak on the phone with their Chinese counterparts, the Treasury secretary said in an interview along the sidelines of the G7 meeting in Chantilly, France.

The United States and China have been embroiled in a tit-for-tat tariff battle since July 2018, as Washington presses Beijing to address what it sees as decades of unfair and illegal trading practices. China has countered that any deal needs to be fair and equitable, leaving the two sides apparently still far from an agreement to end the back-and-forth that has roiled global supply chains and upended financial markets.

“Right now we’re having principal level calls and to the extent that it makes sense for us to set up in-person meetings, I would anticipate that we would be doing that,” Mnuchin told Reuters.

Asked if Thursday’s call could lead to an in-person meeting, Mnuchin said: “It’s possible, but I’m not going to speculate on the outcome.”

Separately, China’s former ambassador to Iceland and former president of China Institute of International Studies, a think-tank affiliated to China’s Foreign Ministry, said he expects more formal discussions to resume this month.

“It will be at the end of the month,” Su Ge said in an interview in New York.

Global stocks have been rattled this week after comments on Tuesday from U.S. President Donald Trump, who reiterated his threat to impose further tariffs on Chinese imports. Signs that the trade dispute was starting to take a toll on corporate earnings further unnerved investors, sending stocks lower on Thursday.

“We have a long way to go as far as tariffs, where China is concerned, if we want. We have another $325 billion that we can put a tariff on if we want,” Trump said at a Cabinet meeting at the White House on Tuesday.

Trump and Chinese President Xi Jinping agreed during a Group of 20 nations summit in Japan last month to resume discussions, easing fears of escalation after talks broke down in early May. At the time of the G20, Trump agreed to suspend a new round of tariffs on $300 billion worth of imported Chinese consumer goods while the two sides resumed negotiations.

“What they did was not appropriate,” Trump said Tuesday. “They are supposed to be buying farm products. Let’s see whether or not they do.”

But sources familiar with the discussions and other experts have indicated China has made no promises of purchases.

“We have not agreed to anything,” Bi Jiyao, vice president at the Chinese Academy of Macroeconomic Research, said in an interview with Reuters. The Academy is a think tank tied to China’s National Development and Reform Commission, the country’s state economic planner.

Asked about the role of Huawei Technologies Co. Ltd., which the administration has blacklisted over national security concerns, Mnuchin on Thursday said allowing any U.S. sales to the Chinese telecom equipment company was an issue independent from the trade talks.

After meeting with Xi at the G20, Trump announced American firms could sell products to Huawei and earlier this month, Commerce Secretary Wilbur Ross said licenses would be issued where there is no threat to national security.

Reuters reported on Sunday that the United States may approve licenses for companies to restart new sales to Huawei in as little as two weeks, according to a senior U.S. official.

Mnuchin denied a Wall Street Journal report last week that said the Treasury chief was urging U.S. suppliers to seek exemptions to sell to Huawei, saying he talks to corporate executives about many issues, including trade.

“My participation in this is only informational. I’ve never encouraged companies one way or the other to do things.”

The Wall Street Journal reported this week that discussions were at a standstill as Washington weighs limits over business with Huawei.

Derek Scissors, a scholar at the American Enterprise Institute think tank who has advised the White House on technology issues, said he expected further relaxations on Huawei to be part of any U.S.-China trade deal.

“The treatment of Huawei has been a circus,” he told a panel hosted by the Brookings Institution. “If we have a deal, Huawei will absolutely be part of it because the president doesn’t care … about technology competition.”

He said Trump was more focused on getting a trade deal and increasing access for U.S. farmers to Chinese markets.

Source: JanpanTimes

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