BEIJING/WASHINGTON -- U.S. President Donald Trump has insisted that Washington is under no pressure to reach a deal with Beijing after Treasury Secretary Steven Mnuchin invited China to resume high-level trade talks.
China has welcomed the offer as it tries to forestall threatened tariffs on $200 billion of its exports. But Trump's comments, made in a tweet on Thursday evening, cast doubt over the likelihood of progress being made.
Chinese Commerce Ministry spokesperson Gao Feng had said that escalating tensions further would not help either side in a press briefing earlier on Thursday. Beijing's quick response to Mnuchin's offer was likely aimed at showing Trump that it is ready for a breakthrough.
The two sides are still discussing details, said Gao, according to China's official Xinhua News Agency. Mnuchin could meet with Chinese Vice Premier Liu He in Washington or Beijing within the next few weeks, U.S. media outlets have reported.
The countries held their most recent high-level trade talks in June, but the dialogue has stalled since then. Trump imposed 25% additional tariffs on $34 billion of Chinese products in July and on another $34 billion in August. China immediately retaliated in kind each time.
With November's midterm congressional elections looming, Trump has repeatedly threatened to impose tariffs on a further $200 billion in Chinese goods. This third round and the previous two would together affect $250 billion -- around half -- of China's annual exports to the U.S., and would inevitably have a severe impact on global supply chains.
Beijing has said it will retaliate against Washington's third round with duties on $60 billion in American products. This would put China's total at $110 billion -- more than 80% of the $130 billion in annual U.S. exports to the country.
With little room left for retaliatory tariffs and a decelerating economy on his hands, Chinese President Xi Jinping has been backed into a corner in the trade war, experts say.
The U.S. is aware of this vulnerability. Drawing China into high-level talks now could yield major concessions, such as greater Chinese imports of American goods.
"This is probably the best time for the U.S. to go back to the table with a 'take it or leave it' type of trade demand," said Robert Carnell, chief Asia-Pacific economist at ING, in a piece published Thursday.
It is interesting that the offer came from Washington and not Beijing, Carnell said. The Federal Reserve's latest Beige Book economic report "did seem to indicate worries of tariffs weighing on investment and employment decisions by firms, so perhaps this is what has spurred a rethink," he said.
Questions over Mnuchin's authority on trade issues could complicate the talks. The moderate official declared the trade war "on hold" following negotiations in mid-May, but Trump later imposed new duties anyway. And U.S. Trade Representative Robert Lighthizer, who is actually in charge of tariffs, holds a more hawkish view on China.
Beijing is naturally doubtful about Mnuchin's control over trade policy, leaving unclear whether a breakthrough can be achieved this time. The talks could also be called off before they start, much like U.S. Secretary of State Mike Pompeo's recent planned trip to North Korea.