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Trade tensions

US-China trade talks to start Thursday without hawk Navarro

American companies divided in stance toward tariffs

China has pledged to retaliate against steep U.S. tariffs with its own levies on products such as soybeans, hitting agricultural regions that provide much of President Donald Trump's support.   © Reuters

WASHINGTON -- The new round of trade talks between the U.S. and China will be held on Thursday and Friday but will exclude the White House's harshest China critic, Peter Navarro, according to diplomatic sources.

Treasury Secretary Steven Mnuchin, Trade Representative Robert Lighthizer and Commerce Secretary Wilbur Ross will lead the U.S. delegation in talks with Chinese Vice Premier Liu He.

Navarro, who is author of a controversial book called "Death by China," attended an initial round of trade talks two weeks ago in Beijing. He acts as a trade and manufacturing adviser to the president. 

The U.S. business community is split over steep tariffs the Trump administration has threatened to impose on Chinese imports, with detractors fearing stiff retaliation and urging dialogue to resolve trade concerns.

Trump last month vowed to slap a 25% tariff on 1,300 categories of Chinese imports worth a total of $50 billion, labeling them punishment for Chinese intellectual property violations. The government opened hearings on the tariff proposal on Tuesday, and will continue to hear from business leaders through Thursday, with around 120 people scheduled to speak.

On day one of the hearings, officials from industries hurt by China's intellectual property violations and trade practices, including the dumping of cheap products on world markets, voiced strong support for the tariffs. Solar panel maker SolarWorld Americas believes "the impact would be very positive," said attorney Tim Brightbill, and even urged "additional remedies" alongside tariffs. Tech companies and some machinery makers also urged the administration to take a hard line with China.

American farmers, on the other hand, are "concerned about the [tariffs'] potential ramifications to U.S. agriculture," said Nathan Bowen, executive director for public policy at the National Association of State Departments of Agriculture. China has pledged retaliatory tariffs on American agricultural products -- including soybeans, the country's top U.S. import -- if Trump makes good on his threat.

"Instead of new tariffs, we believe bilateral negotiations and engaging a coalition of like-minded countries will more effectively advance the administration's goal of free and fair trade with China," Bowen said.

The electronics sector fears direct damage from the U.S. tariffs, as both retailers and manufacturers of such products as televisions rely heavily on Chinese imports. A tariff on flat-screen TVs "will have negative unintended consequences on U.S. retailers like Best Buy, American workers, and consumers," said Mike Mohan, Best Buy's chief marketing officer.

Mary Buchzeiger, CEO of auto parts maker Lucerne International, said tariffs on essential components would force her to relocate operations from the state of Michigan to cheaper labor markets abroad. A chemical industry executive warned that rising material costs would hurt investment in the U.S.

The Trump administration will accept public feedback through May 22 as it draws up a final tariff plan. Due to a flood of comments from the business community, it could take longer than previously expected to finalize the plan, according to a source in the Office of the U.S. Trade Representative. This will give Washington more time to negotiate with Beijing, the source said.

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