China and U.S. Hold ‘Candid’ Talks on Tariffs, Climate

(Bloomberg) — The U.S. and Chinese governments made some incremental progress in their economic and trade negotiations, with Chinese Vice Premier Liu He and U.S. Treasury Secretary Janet Yellen holding their second call in about four months.

The call was described as “pragmatic, candid and constructive” by the Chinese, and the two came to an agreement that it’s very important for China and the U.S. to strengthen communication and coordination of macroeconomic policies as the world’s recovery is at a critical moment, according to a Chinese statement after the phone call.

Although there are still multiple areas of tension, there has also been some improvement in relations between the two nations recently, with the release by Canada of a Chinese corporate executive removing one source of friction. Washington and Beijing have also been rebuilding communication lines cut off during years of clashes over everything from trade and Taiwan to tech and the origins of the coronavirus under the Trump administration.

The call on Tuesday morning Beijing time was the second time that Liu and Yellen have spoken since President Joe Biden came into office, following a June call in which they discussed how to “support a continued strong economic recovery and the importance of cooperating on areas that are in U.S. interests, while at the same time frankly tackling issues of concern,” according to a U.S. statement at the time.

While the tone of Tuesday’s Chinese statement was more positive than in June, there has been little substantive progress over trade or economic issues. The Chinese side once again expressed its views on U.S. tariffs and sanctions and the treatment of Chinese companies, but there was no mention of the Yellen’s response in either the Chinese or U.S. statements.

China has repeatedly said the U.S. should remove the tariffs on Chinese exports imposed during the administration of former President Donald Trump, and is very critical of U.S. sanctions against companies like Huawei Technologies Co. Ltd.

Yellen “frankly raised issues of concern” with Liu, according to a U.S. statement after the call Tuesday morning Beijing time. The two sides agreed to continue talking, both statements said, without providing any further details.

Earlier this month U.S Trade Representative Katherine Tai said that she would push the Chinese to fulfill their commitments in the 2020 trade deal and later directly told Liu about U.S. concerns “relating to China’s state-led, non-market policies and practices that harm American workers, farmers and businesses.”

Contact editor Michael Bellart (michaelbellart@caixin.com)

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