Geneva: Despite the worsening trade war and continued retaliatory measures, the US and China are resuming talks later this month. However, chances of a breakthrough remain bleak for the time being, according to analysts.

China is sending its tenacious negotiator and vice-minister of commerce Wang Shouwen for talks at the invitation of a senior US treasury department official for international affairs, David Malpass. Significantly, the US treasury department has taken the initiative to kick-start the talks though it is not the nodal point for resolving trade frictions with other countries. The office of the US trade representative (USTR) led by Robert Lighthizer holds the dominant position for resolving and addressing bilateral and multilateral trade issues.

During the previous rounds of trade talks between the US and China, US treasury secretary Steven Mnuchin has emerged as a pacifist for finding a compromise unlike his colleague the Lighthizer, a long-time China hawk, according to analysts.

After the talks between China and the US in May, the US treasury secretary remained hopeful of breaking the ice on the trade front with China. But the USTR poured cold water on Mnuchin’s hopes by warning that the US wanted substantial change in China, according to the Financial Times of 21 May. “Getting China to open its market to more US exports is significant, but far more important issues revolve around forced technology transfers, cyber theft and protection of our innovation," Lighthizer reportedly said.

In sharp contrast to the continued divisions within the US administration, China had consistently presented a unified position. China’s commerce ministry said on Thursday it “welcomes communications and dialogue on the basis of reciprocity, equality, and integrity". It stated unambiguously that it “opposes unilateralism and trade protectionism".

China’s Wang, who had participated in all previous rounds of talks with the US had stated that “the US started the trade war against the interests of the US, its consumers, workers, and ranchers".

“There had been progress for resolving the outstanding issues between China and the US after four rounds of high-level discussions during this year… So much so that the US said it will put its (proposed) measures (on account of Section 301 investigations that found China for adopting forced transfer of technologies and stealing intellectual properties) on hold and all of a sudden an announcement was made to impose tariffs on imports of Chinese products," minister Wang told reporters on 12 July in Geneva.

Moreover, “for any talks to be (a) success, no party should point a gun at other party and for any talks to be useful, every party needs to keep its word", the Chinese minister argued. “The 301 investigations", according to Wang, “runs counter to the US’ own commitment made to the (World Trade Organization dispute settlement) panel in a case brought by the European Union in 1999 against the US", he had pointed out.

“The 301 investigation and the measures taken (by the US President Donald Trump) are a total violation of the WTO principles of most-favoured-nation treatment and the scheduled binding commitments," the Chinese minister had stated.

Last month, Trump imposed duties on $34 billion of Chinese goods ostensibly for violating the controversial Section 301 provisions, a move that prompted immediate retaliation from Beijing. Another $16 billion in additional tariffs against Chinese goods will come into effect on 23 August.

China unveiled a list of $60 billion worth of imports from the US that will be subjected to retaliatory tariffs. Subsequently, Trump ordered his officials to consider imposing a 25% additional duty on $200 billion worth of Chinese goods, up from 10%.

Trump’s director for national economic council Larry Kudlow told CNBC on Thursday “the Chinese government in its totality must not underestimate President Trump’s toughness and willingness to continue this battle to eliminate tariffs and non-tariff barriers and quotas to stop the theft of intellectual property and to stop the forced transfer of technology."

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