US expects talks with China as trade fight escalates
President Trump's top economic adviser says tariffs may not go into effect
The US voiced willingness on Wednesday to negotiate a resolution to an escalating trade fight with China after Beijing retaliated against proposed US tariffs on US$50 billion (S$65 billion) in Chinese goods by targeting key American imports.
Just 11 hours after President Donald Trump's administration proposed 25 per cent tariffs on some 1,300 Chinese industrial, technology, transport and medical products, China shot back with a list of similar duties on major American imports, including soybeans, planes, cars, beef and chemicals.
Beijing's swift and forceful response raised the prospect of a quickly spiraling dispute between the world's two economic superpowers that could harm the global economy.
While Mr Trump posted defiant messages on Twitter, his administration signalled possible wiggle room.
Asked whether the US tariffs announced on Tuesday may never go into effect and may be a negotiating tactic, Mr Trump's top economic adviser Larry Kudlow told reporters: "Yes, it's possible. It's part of the process."
He called the announcements by the two countries mere opening proposals.
Mr Kudlow later told Fox News Channel: "I don't think it's a trade war. I think there is going to be intense negotiations on both sides.
"I think we're going to come to agreements."
And he added: "I believe that the Chinese will back down and will play ball."
Mr Cui Tiankai, China's ambassador to the US, held an hour-long meeting at the US State Department in Washington with acting Secretary of State John Sullivan.
"Negotiation would still be our preference, but it takes two to tango. We will see what the US will do," he said afterwards.
The trade actions will not be carried out immediately, so there may be room for manoeuvre.
Publication of Washington's list on Tuesday started a period of public comment and consultation expected to last around two months. The effective date of China's moves depends on when the US action takes effect.
If the two countries are unable to settle the dispute, a full-scale trade war could destabilise US-Chinese commercial ties, an important component of the global economy.
China's action rattled US farmers, while shares in US exporters of everything from planes to tractors were volatile.
After dropping at the outset of trading, Wall Street's three major indexes staged a comeback to close about 1 per cent higher as investors turned their focus to earnings and away from the trade fight.
White House spokesman Sarah Sanders said US implementation of the tariffs would depend on China's behaviour.
"It's going to be a couple months before tariffs on either side would go into effect and be implemented and we're hopeful that China will do the right thing," she told reporters.
"I would anticipate that if there are no changes to the behaviour of China and they don't stop the unfair trade practices, then we would move forward," Ms Sanders said. - REUTERS