China, US set for new round of trade talks

China's senior officials and their US counterparts are set to begin a new round of trade talks in France later this week, with analysts expecting discussions to focus on extending their tariff truce and easing export controls while exploring areas of shared interests.

The outcome of the talks will be closely watched by economies worldwide as any progress in dialogue between the world's two largest economies is expected to generate positive ripple effects on global market confidence and economic stability, analysts added.

According to a Friday announcement from the Ministry of Commerce, Chinese Vice-Premier He Lifeng will lead a delegation to France for the sixth round of economic and trade consultations with US officials from Saturday to Tuesday.

Top negotiators from Beijing and Washington will hold discussions on "economic and trade issues of mutual concern", the ministry said.

The talks unfold against a backdrop of swift US actions to renew its tariff pressure. The launch by the US of Section 301 investigations on Wednesday into many of its trading partners, including China, has added a new layer of complexity.

The US probes, announced days before the talks, represent an effort to "create leverage" through unilateral trade tools after the US Supreme Court curtailed a broader tariff program last month, said Bai Ming, a researcher at the Chinese Academy of International Trade and Economic Cooperation.

The Chinese Commerce Ministry said on Friday in a separate announcement responding to the Section 301 investigations that "China urges the US to correct its wrongdoings and return to the right track of resolving issues through dialogue and consultation".

China will closely monitor the developments and reserve the right to take all necessary measures to resolutely safeguard its legitimate rights and interests, the ministry added.

Luo Zhiheng, chief economist and head of the research institute at Yuekai Securities, noted that while US tariff levels on Chinese goods have declined following the Supreme Court's ruling striking down broad-based duties, they remain at historically elevated levels, and more importantly, the US policy uncertainty facing businesses has not been eased.

In the immediate aftermath of the court decision, the US invoked Section 122 of the Trade Act of 1974, imposing a 10 percent import surcharge on all trading partners, effective from Feb 24 to July 23.

As long as tariffs imposed unilaterally in breach of WTO rules remain in place, they will damage bilateral economic and trade relations, said Liao Fan, director of the Chinese Academy of Social Sciences' Institute of World Economics and Politics.

"The first priority is to ensure tariffs are only reduced, not increased, fostering a good foundation for bilateral negotiations and anchoring business expectations," Liao said, adding that the discussions on export controls and investment restrictions might also be on the agenda.

Zhao Zhongxiu, president of the Beijing-based University of International Business and Economics, said that Washington seeks eased restrictions on strategic rare earths, while Beijing demands a halt to high-tech export controls. "Negotiating these boundaries is vital to prevent a disorderly fracturing of the global technology ecosystem," he added.

Analysts also expect that more details on expanding trade in agricultural products between China and the US are likely to emerge this time — an important issue that was mentioned during the fifth round of trade talks in Kuala Lumpur last October.

Normalizing agricultural flows and improving conditions for finance, digital services and logistics would directly leverage the long-standing complementarity in demand and competitiveness between the two nations, Zhao said.

"Positive progress in this round would send a powerful signal to international markets that both nations are actively managing their disputes," Zhao said, cautioning that should Washington pursue an unreasonable, maximalist approach, China retains a robust and expanding toolkit of asymmetric countermeasures to defend its economic sovereignty.