US lawmakers press Xi aide on China’s unfair trade actions

WASHINGTON (BLOOMBERG) – US lawmakers pressed Chinese President Xi Jinping’s top economic adviser to stop unfair trading practices as the nations try to pull back from the brink of a trade conflict.

“I urged the Chinese vice-premier to seize this moment in time to address these lasting concerns and to continue to grow this relationship in a more fair way,” said Mr Kevin Brady, the Republican chair of the House Ways and Means Committee that oversees trade issues.

Mr Brady spoke to reporters in Washington after his committee met with Chinese Vice-Premier Liu He, who is visiting Washington this week for talks with the Trump administration on ways to resolve a brewing trade dispute. 

Mr Liu, who had already met US negotiators led by Treasury Secretary Steven Mnuchin in Beijing this month, is said to be optimistic that an agreement can be reached, CNBC reported.

Later, Senate Finance Committee Chair Orrin Hatch, a Republican, sounded a more pessimistic tone over a deal to avert tariffs after he met with Mr Liu. 

Asked if the Trump administration will move forward with proposed levies on Chinese goods, Mr Hatch said “I think they will go into effect.” 

A Senate Republican aide said that Mr Hatch doesn’t support tariffs and is hopeful the US won’t need to use them, but he wants to ensure the administration can keep them on the table, particularly with China in town this week.

Mr Liu gave the ‘OK’ hand gesture to waiting reporters as he left Mr Hatch’s office.

 Earlier on Wednesday, President Donald Trump continued to defend the lifeline he offered to Chinese telecoms equipment-maker ZTE Corp, insisting trade talks with Beijing are just getting started. 

“Nothing has happened with ZTE except as it pertains to the larger trade deal,” Mr Trump said in a series of tweets on Wednesday.

The President surprised many in Washington over the weekend by saying he’s working with Mr Xi to help ZTE “get back into business, fast”. 

The Chinese company has been crippled by a US decision to cut off its access to key components from American suppliers for making false statements in a sanctions case.

Mr Trump’s reversal was condemned by both Republican and Democratic lawmakers, and raised questions about whether the President was softening his approach in trade negotiations with China. 

Florida Republican Senator Marco Rubio said the move was a sign that the US was about to “get out-negotiated by China again”. 

Mr Brady and Mr Hatch said the issue of ZTE didn’t come up during Mr Liu’s meetings with lawmakers.

Mr Mnuchin will lead discussions with Mr Liu, along with Commerce Secretary Wilbur Ross and US Trade Representative Robert Lighthizer, at the Treasury Department offices in Washington on Thursday and Friday, the White House said in a statement. 

White House trade adviser Peter Navarro, a China trade hawk, was initially excluded from the negotiations, according to two administration officials. But a White House official later said that he would participate in the talks. The officials were granted anonymity to discuss the matter.

 Before officials travelled to Beijing for talks, the US issued a series of demands, including that China reduce its trade surplus with the US by US$200 billion (S$267.68 billion) in two years. 

According to a document seen by Bloomberg News, Beijing asked the US to open government procurement to Chinese firms, and soften the Commerce Department penalty on ZTE, among other things.

“We have not seen China’s demands yet, which should be few in that previous US Administrations have done so poorly in negotiating,” Mr Trump said. “China has seen our demands.” 

Uncertainty over relations between the US and China has roiled financial markets and raised concerns among businesses worried about a trade war. 
Mr Trump has threatened to impose tariffs on as much as US$150 billion in Chinese imports to punish Beijing for violating American intellectual property rights. 

China has vowed to retaliate on everything from US soybeans to airplanes.

Mr Liu told the group of House representatives on Wednesday that he wanted to address trade imbalances by increasing Chinese demand for American products, Mr Brady said.

 “The vice-premier stated that he was here to listen to our concerns and he recognises there are problems in this trade relationship.” 

Ways and Means committee members Tom Reed, a New York Republican, and Democratic Representative Sandy Levin, of Michigan, said a goal in the meeting with Mr Liu was to show bipartisan support for countering China’s trade practices.

“The message that I delivered was one that we are unified when it comes to calling out unfair practices and just looking for an opportunity to have a fair trade relationship,” Mr Reed said.