China, US set for upcoming talks in Beijing
Posted January 4, 2019 4:56 a.m. EST
Updated January 4, 2019 11:35 a.m. EST
(CNN) — China has set a date for a new round of talks with the United States aimed at ending a trade war that is spooking global markets and hurting businesses.
China's Commerce Ministry said Friday that US deputy trade representative Jeffrey Gerrish would hold negotiations with Chinese officials on January 7-8 in Beijing. The White House is yet to confirm the talks.
The office of the United States Trade Representative also released a statement Friday announcing the delegation that would be representing the US.
In addition to Gerrish, the official delegation will also include David Malpass, the Treasury Department's undersecretary for international affairs. Also set to travel are USTR's chief agricultural negotiator Gregg Doud; the Department of Agriculture's under secretary for trade and foreign agricultural affairs Ted McKinney; Commerce Department undersecretary for international trade Gilbert Kaplan and the Energy Department's assistant secretary for fossil energy Steven Winberg.
When asked whether negotiations would be impacted by the ongoing government shutdown, which touches USTR as well as other departments involved, a spokesperson referred to a December statement in which USTR said trade negotiations would continue under existing funds.
The upcoming talks will be the first formal negotiations on trade between the world's two biggest economies since President Donald Trump and his Chinese counterpart, Xi Jinping, agreed to a truce at the G20 summit in Argentina last month.
US trade negotiators will "optimistically and constructively communicate with (the) Chinese delegation on the important agreements achieved by the two leaders during the meeting in Argentina," China's Commerce Ministry said in a statement, without giving further details. Officials from both countries spoke on the phone Friday, it added.
Uncertainty over whether the two sides can build on the ceasefire agreed by Trump and Xi in Argentina has fueled volatile trading in global markets.
The Dow dropped 660 points, or 2.8%, on Thursday after Apple (APPL) warned it will badly miss its quarterly sales forecast because of weaker growth in China and the trade war.
White House Council of Economic Advisers chairman Kevin Hassett said in an interview with CNN's Poppy Harlow on Thursday that "a heck of a lot" of US companies will have the same problem unless a deal is struck to lift tariffs imposed by both sides last year.
China's own stock market has fallen by about 25% in the last year as investor concerns grew about the impact of the trade war on China's economy.
Markets reacted positively on Friday after the Chinese government set a date for the trade talks. China's Shanghai Composite and Hong Kong's Hang Seng Index were both up about 2%.
But if the two economic superpowers are unable to reach a lasting deal within a 90-day deadline set by their leaders, the damaging trade war could escalate further with the imposition of more tariffs on hundreds of billions of dollars of goods.
China's economy has lost momentum in the last year as the government has tried to curb risky lending. An escalating trade war would make the situation even worse.
New tensions emerge
A new strain in the US-China relationship emerged in December when Canada announced it had carried out a US request to arrest the chief financial officer of Huawei, one of China's top tech companies. The US government is seeking the extradition of the executive, Meng Wanzhou, over alleged violations of sanctions on Iran.
The arrest highlighted the intensifying clash between the world's top two economies over technology. Huawei is key to China's efforts to become a global tech powerhouse and lead the introduction of 5G wireless technology around the world.