05:45 - Source: CNN Business
US-China trade war: 'There are no winners'
CNN —  

Senior US trade officials plan to host China’s top trade negotiator later this month in Washington, according to a person familiar with the plans.

Talks among senior officials in January would come on the heels of negotiations this week in Beijing. Those talks were intended to be deputy-level, but in a surprise move, Chinese Vice Premier Liu He attended the first day of the talks, Bloomberg News reported earlier Monday.

This week’s negotiations serve as a litmus test on whether a deal can be achieved before March 1, when President Donald Trump has threatened to impose another round of tariffs and to raise duties on imports to 25% from 10%.

The escalating trade war over the last year has contributed to an economic slowdown in China and triggered volatility in US markets as companies start to see the effects of slowing demand in China – most notably Apple, which last week blamed lower quarterly revenues on “deceleration” in China.

In response, Trump said he wasn’t concerned about Apple’s future and encouraged CEO Tim Cook to move his supply chain to the United States.

Despite Apple’s warnings and market volatility, the Trump administration believes the US has the upper hand in negotiations because the American economy is relatively strong compared to China’s, according to two administration officials.

That view has been publicly aired by top economic aides.

“Right now, China is feeling the blow really of our tariffs, and I think that that’s an appropriate place for us to have taken the relationship given the amount of stuff that they were stealing from us,” said White House Council of Economic Advisers chairman Kevin Hassett said in an interview with CNN’s Poppy Harlow last week.

While the Trump administration’s hardline stance has failed to produce a comprehensive trade agreement so far, the two sides reached a truce in early December after Chinese President Xi Jinping met with Trump at the G20 summit in Buenos Aires.

Trump agreed to maintain 10% tariffs on $200 billion worth of Chinese goods, and not raise them to 25% “at this time” ahead of a January 1 deadline.

In exchange, China said it was willing to purchase a “very substantial” amount of agriculture, energy and other goods from the United States to help reduce the trade imbalance.