US President Donald Trump’s top economic adviser said the United States welcomed the resumption of talks with China on trade, while Vice President Mike Pence warned Beijing to change its behavior so as to avoid a new cold war with the US, Reuters reports.
National Economic Council Director Larry Kudlow told reporters at the White House on Tuesday that Washington and Beijing are “now communicating at all levels and that’s a very good thing”.
Kudlow said “it’s pretty clear now” that Trump will meet with Chinese President Xi Jinping at the Group of 20 industrialized nations meeting in Argentina later this month.
“We are working on background materials in preparation and we’re waiting for China to come back with some thoughts,” he added.
When asked if he was looking for concessions before the meeting, Kudlow said: “We would like to hear from them some responses to the things we’ve asked for in the last, I don’t know, five or six or seven months.”
Trade negotiations between the two countries had been put on pause, Commerce Secretary Wilbur Ross said last month. The US has consistently sought concessions from China on intellectual property and technology, as well as tariffs on imports of US goods.
Pence, meanwhile, told the Washington Post in an interview that China should change its behavior to avoid a cold war with the US, and Trump is looking for “concrete proposals” from Beijing.
“The president’s attitude is, we want to make sure they know where we stand, what we are prepared to do, so they can come to Argentina with concrete proposals that address not just the trade deficit that we face … We’re convinced China knows where we stand,” Pence said in the interview.
Pence also said China must offer concessions on intellectual property theft, forced technology transfer, restricted access to Chinese markets, respect for international rules and norms, and efforts to limit freedom of navigation in international waters, among other issues.
If Beijing does not produce proposals that satisfy Washington, the US is prepared to increase economic, diplomatic and political pressure on China, Pence told the newspaper.
“We really believe we are in a strong position either way. We are at US$250 billion [in tariffs] now; we can more than double that,” Pence said. “I don’t think it’s a matter of promises. We’re looking for results. We’re looking for a change of posture.”
Yellen links trade deficit to rate hikes
Former Federal Reserve chair Janet Yellen said US interest rate hikes are causing the country’s trade deficit to widen, not unfair trade practices, Bloomberg reported.
Higher interest rates are putting upward pressure on the US dollar exchange rate, and “this is part of why we may get a larger trade deficit”, Yellen told a conference in Beijing via a video link on Tuesday.
“I do not see unfair trade practices in China, or anywhere in the world, as what is responsible for the US trade deficit,” Bloomberg quoted Yellen as saying. “The US trade deficit reflects the fact that Americans spend more than we produce, and we import excess goods and services from the rest of the world to satisfy that demand.”
Yellen said the US central bank is likely to raise rates three to four more times over the next year “to stabilize the unemployment rate”.
“We have a country that was already operating at around full employment before the recent tax cuts took place, and additional spending has spurred expansionary fiscal policy,” Yellen said. “That’s pushed the economy to the point of perhaps overheating.”
“It’s something that – although the Fed was already on the path of rate increases – leads to higher rate increases, more rate increases, than we would otherwise have, to offset that stimulus,” she added.
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