Washington and Beijing just agreed fresh trade talks, but the man leading the US delegation should have China worried

U.S. President Donald Trump shakes hands with a performer at the Forbidden City in Beijing, China, November 8, 2017.

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U.S. President Donald Trump shakes hands with a performer at the Forbidden City in Beijing, China, November 8, 2017.
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REUTERS/Jonathan Ernst

  • US and China agree to hold first substantive trade talks since truce was struck at November’s G20 summit in Argentina.
  • US officials will travel to Beijing for talks on Monday and Tuesday next week, with China’s Ministry of Commerce saying it hopes the talks will be “positive and constructive.”
  • Jeffrey Gerrish, the US deputy trade representative will lead the delegation travelling from Washington to China.
  • Gerrish has been mentored by Robert Lighthizer, the US trade representative who is particularly hawkish on China.

The US and China on Friday confirmed that they will hold discussions over future trade between the two nations next week, the first such talks since a tentative truce was reached at November’s G20 summit in Argentina.

Officials from the Trump administration will travel to Beijing for discussions to be held on Monday and Tuesday, with the ambition that both sides will be able to build on the agreement made in Buenos Aires.

That agreement saw China commit to renewed purchases of US agricultural goods like soybeans, in return for the delay of a fresh swathe of tariffs Washington was set to impose on Chinese goods.

China’s Ministry of Commerce (MOFCOM) said in a statement that it hoped the talks would be “positive and constructive.”

Since the agreement there have been tentative signs that China is ready to make concessions to the US in order to lessen the impact of the trade war on its economy, with the Wall Street Journal reporting in December that Beijing is preparing to replace its Made in China 2025 plan with a new economic blueprint that would aim for increased access to China for foreign companies.

US access to China to do business has been one of the key sticking points of the two countries’ trade relationship, and President Trump has explicitly criticised the Made in China plan previously.

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The US delegation to China will be led by Jeffrey Gerrish, the deputy trade representative, something which some trade experts believe will mean that the US will be particularly firm in its demands.

Gerrish is close to Robert Lighthizer, the US trade representative, and the official most in favour of using the trade war to punish China.

“Lighthizer was a mentor to him, so I think they share a similar world view,” Scott Kennedy, a China expert at the Center for Strategic and International Studies told the Financial Times.

Lighthizer opposed China’s entry into the World Trade Organization in the 1990s and more recently was a driving force behind Trump’s decision to impose tariffs on roughly $250 billion worth of Chinese goods.

Lighthizer’s office was also responsible for the original report last year that laid out allegations of Chinese theft of US intellectual property and formally kicked off the tariff process.

Should Gerrish take a similarly tough stance to Lighthizer, it could be a rough couple of days for China’s negotiators.

News of the talks comes less than 48 hours after Apple CEO Tim Cook warned that trade tensions between the two countries are hurting business at the world’s most prominent tech company.

“The trade tensions between the United States and China put additional pressure on their economy,” Cook said in an interview with CNBC Wednesday.

That announcement rocked markets Thursday, but global stocks have bounced back after news of the fresh talks, with futures pointing to a 1% or more gain for all three major US indexes later in the day.