WASHINGTON: Top U.S. and Chinese negotiators met on Thursday for the first time since late July to try to ease a bitter 15-month trade war and business groups expressed optimism that they might be able to find enough common ground to delay a U.S. tariff hike scheduled for next week.
Lower-level "early harvest" agreements on issues such as currencies and copyright protections were possible despite increased irritants between the world's two largest economies, a U.S. Chamber of Commerce official briefed by both sides said.
Myron Brilliant, the Chamber's head of international affairs, told reporters that negotiators were "trying to find a path toward the bigger deal" with progress on market access and less controversial intellectual property and other issues.
"I believe that there's even the possibility of a currency agreement this week. I think that could lead to a decision by the U.S. administration to not put forth a tariff rate hike on Oct. 15."
U.S. President Donald Trump sent another optimistic signal about the talks, tweeting on Thursday that he would meet with China's top negotiator, Vice Premier Liu He at the White House on Friday.
"Big day of negotiations with China," Trump said on Twitter. "They want to make a deal, but do I?"
U.S. Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer greeted Liu on the steps of the USTR office near the White House on Thursday morning.
Negotiations continued over lunch.
Steady escalations of the tit-for-tat tariffs on Chinese and U.S. goods have roiled financial markets and stoked fears of a global recession.
Stocks rose on optimism that talks would yield at least a partial truce, with the S&P 500 up 0.65per cent and the Nasdaq up 0.6per cent.
The mood surrounding the talks had soured earlier this week when the U.S. government blacklisted 28 Chinese public security bureaus, technology and surveillance firms, including video surveillance gear maker Hikvision., over allegations of abuses of Muslim minorities in China.
Washington also restricted visas for certain Chinese officials over the same issue and Beijing was said to be planning to tighten visa restrictions for U.S. nationals with ties to anti-China groups.
But Chinese officials indicated more willingness to negotiate and avoid further escalation, according to Chinese state media reports.
"The Chinese side came with great sincerity, willing to cooperate with the U.S. on the trade balance, market access and investor protection," Xinhua quoted Liu as saying on Thursday.
The U.S. Agriculture Department said on Thursday that private exporters reported a snap sale of 398,000 tonnes of soybeans to China, part of a flurry of purchases the top buyer of the oilseed has made since granting tariff waivers to some importers to buy U.S. soy as a goodwill gesture.
USDA also reported record-large sales of pork, including 18,810 tonnes for shipment this year and 123,362 tonnes for shipment in 2020.
The two sides have been at loggerheads over U.S. demands that China improve protections of American intellectual property, end cyber theft and the forced transfer of technology to Chinese firms, curb industrial subsidies and increase U.S. companies' access to largely closed Chinese markets.
The discussions were not expected to address the most contentious issues in the talks, leaving them for a possible future negotiations.
Brilliant, the U.S. Chamber official, said that the intellectual property issues under discussions were largely "20th century IP protections" involving copyright and trademark infringement, not those to protect data flows, computer source code and commercial data.
A currency agreement would likely follow one that was largely agreed in February by Washington and Beijing that would parallel China's prior G20 pledges to avoid currency manipulation to gain a trade advantage, said Craig Allen, president of the U.S.-China Business Council
"It's time to roll that thing out," said Allen, who also met with Liu on Wednesday. "It would be a positive, and would make it easier for the U.S. side to sign a deal."
A new flashpoint ignited this week: China's swift action to cut corporate ties to the National Basketball Association over a team official's tweet in support of Hong Kong pro-democracy protesters.
(Reporting by David Lawder; Editing by Simon Cameron-Moore, Paul Simao and Sonya Hepinstall)