Optimism cautious on trade talks

Analysts in Washington and beyond expressed their cautious optimism about a fresh round of trade talks between China and the US — at the vice-ministerial level, as Wall Street reacted positively on Thursday to the news.

At the invitation of the US side, the new trade discussions, scheduled for late August, will be led by Vice-Minister of Commerce Wang Shouwen on the Chinese side, and by the US Treasury's Undersecretary for International Affairs David Malpass on the US team.

The two sides haven't talked since early June.

"I see it as a potentially hopeful sign because they are at least showing a willingness to talk again," said Jon Taylor, a professor of political science of the University of St. Thomas in Houston.

Taylor said he would "urge caution regarding expectations", given the trade environment created by the Trump administration's protectionist tariffs and rhetoric.

"The best that we can hope for is that these lower-level talks will be successful in getting higher-level officials to the table for substantive policy talks, thereby setting the stage for an eventual resolution to this counterproductive trade war," he said.

Simon Lester, associate director of the Cato Institute's Herbert A. Stiefel Center for Trade Policy Studies, said he had low expectations for the meeting, partly because the person that is representing the US in the negotiation is from the Treasury Department, which is a different department, and not the head of the agency.

"It may just be that two months have gone by and they wanted to check in," Lester said.

But Marc Busch, a professor of international business diplomacy at Georgetown University, said timing is important regardless of the relatively lower level both sides are represented.

"Both sides have chosen this moment to resume negotiations because both sides realize how much there is at stake and how much they can both lose if things aren't resolved shortly," Busch told China Daily.

News that trade talks between China and the US would resume sent US stocks sharply higher on Thursday, with the Dow Jones Industrial Average jumping by 1.6 percent to 25,558.73, as Walmart surged by 9.3 percent.

Several trade specialists contacted by China Daily on Thursday said the pace of the negotiations seemed to be tied to US mid-term elections and thus a breakthrough is unlikely in the near run.

Douglas H. Paal, vice-president of the Asia Program at the Carnegie Endowment for International Peace, said he believed the new meeting will be a difficult negotiation, as the two sides have much disparity to close.

"Having working level talks on these specific issues is not a bad idea, however, if only to start identifying points of agreement that might be reached considerably later," Paal said.

He said a breakthrough seems unlikely before the US mid-term elections, as both sides need time at least to measure the effects of actions so far.

Gary Hufbauer, a senior fellow and trade expert at the Peterson Institute for International Economics in Washington, said US President Donald Trump is happy to engage in a fresh round of negotiations.

"Trump has discovered the adverse financial impact (stock and currency markets) of his sanctions on Turkey, though this is something economists could have told him," Hufbauer told China Daily.

"Putting 25 percent tariffs on $200 billion of imports from China would have a far larger adverse impact.  Financial turmoil would not help Republican prospects in the November election," Hufbauer said.

Hufbauer said he remained skeptical of a breakthrough, but the talks could continue into December at least, past the November mid-term elections.

"For the next few months, I think we will see a defusing of the trade dispute," he said.

Ying Wang contributed to this story.

Contact the writer at huanxinzhao@chinadailyusa.com.