US Axes Tariffs On Chinese Goods In Trade War Thaw


The United States and China announced a major thaw in their trade war Friday, including immediate cuts to punishing import tariffs, but markets were not impressed.

“We have agreed to a very large Phase One Deal with China,” President Donald Trump tweeted after officials in Beijing made a similar announcement.

A signing of the deal at ministerial level is expected for “the first week of January,” a senior Trump administration official told reporters.

The news is a boon for Trump who faces a congressional vote on impeachment for abuse of office next week. With his 2020 reelection campaign gathering pace, he needs to show voters that his habit of starting bruising trade wars is bearing fruit.

So after multiple false dawns in the tussle between the world’s top two economies, which Trump launched in March 2018, investors were relieved to see him cancel a new round of tariffs due to kick in on Sunday.

Those levies, which would have hit consumer electronics like cell phones and computers, “will not be charged because of the fact that we made the deal,” Trump tweeted.

In a major concession, Washington will also slash in half the 15 percent tariffs imposed on $120 billion in Chinese goods, like clothing, that were imposed September 1 and had a bigger impact on American shoppers than previous rounds.

But Trump said existing tariffs of 25 percent on $250 billion of Chinese imports would stay in place pending further negotiations on a second phase deal.

In return, US officials say, China is committing to increasing purchases in four sectors: agriculture, manufacturing, energy, and services.

Purchases will hit “at least $200 billion dollars over the next two years,” the administration official explained, on condition of anonymity.

In addition, the official said, China is agreeing to start structural reforms, including on the key problem of intellectual property rights.

Reprieve for US Farmers

American farmers who bore the brunt of the trade war and retaliation by Beijing which slashed exports, will especially benefit from the increased purchases, US officials say.

“I think in agriculture they will hit $50 billion,” and take effect “pretty soon,” Trump told reporters at the White House.

Meanwhile, China’s Vice Finance Minister Liao Min told reporters that Beijing would also call off retaliatory tariffs planned to respond to Sunday’s now scrapped US measures.

Vice Commerce Minister Wang Shouwen said the initial agreement includes strengthening protection of intellectual property rights, expanding market access and safeguarding rights of foreign companies — issues at the heart of US complaints.

“It is hoped that both sides will abide by the agreement, work hard to implement the relevant contents of the first phase of the agreement.”

The US official told reporters that Washington is satisfied it can enforce the deal, “potentially in the form of tariffs.”

Skepticism is High

Though investors were relieved to see Sunday’s threatened tariffs removed, US stock markets didn’t appear to like the deal much.

Trade economist Mary Lovely said the deal could only be viewed as a “partial win” which “didn’t move the needle very much.”

The gains do not compensate for the damage to US farmers and businesses, she told reporters.

“President Trump is desperately trying to get back to where the economy was 18 months ago,” before taking this “unilateral, brute force approach,” Lovely said.

In a sign that tensions remain high, Foreign Minister Wang Yi said earlier Washington was “suppressing” China in a number of fields, including the economy, trade and technology and had “seriously damaged the foundation of hard-earned trust between China and the US.”

Washington has also angered Beijing by backing Hong Kong’s pro-democracy movement and criticizing China’s mass detention of mostly Muslim minorities in the northwest region of Xinjiang.

Trade War: China Continues To Buy ‘Considerable’ Amounts Of American Pork, Soybeans

Workers transfer products made with soybeans imported from Brazil at a port in Nantong in China's eastern Jiangsu province on September 19, 2019. STR / AFP
Workers transfer products made with soybeans imported from Brazil at a port in Nantong in China’s eastern Jiangsu province on September 19, 2019. STR / AFP



Beijing said Thursday it had bought a “considerable” amount of US pork and soybeans, the latest sign of appeasement between the two sides in the drawn-out trade war.

The US and China have been locked in a bruising trade war for more than a year, with the world’s two biggest economies slapping tariffs on hundreds of billions of dollars in bilateral trade.

China is also facing a severe shortage of pork — a staple food in the country — because of an outbreak of African swine fever which has raced through its hog supply and pushed prices up by 50 percent.

“Recently Chinese enterprises have … started price inquiry and purchases of US agricultural products, and have also completed a transaction of soybeans and pork of considerable size with the US,” said commerce ministry spokesman Gao Feng at a regular press briefing.

Gao said “China’s market demand for high-quality agricultural products is very large” and that he hoped the two sides could “create beneficial conditions for cooperation.”

Earlier in September, China said high-profile US agricultural products including pork and soybeans would be exempt from added tariffs, ahead of the next round of trade talks scheduled for October.

It marked easing tensions between the world’s two biggest economies.

A Conciliatory Move?

American farmers have borne the brunt of the US-China trade spat, especially after US soy exports collapsed last year.

President Donald Trump has previously accused Beijing of backsliding on promises to increase purchases of US farm goods and has offered billions in aid to farms badly damaged in the trade war.

China’s conciliatory move to exempt pork and soybeans followed an unexpected announcement from Trump that he would postpone an October 15 tariff increase on Chinese products representing $250 billion in annual imports.

Tensions between the two have ebbed and flowed since then, with Trump criticising Beijing in a speech at the United Nations this week over its trade policy and approach to pro-democracy unrest in Hong Kong.

The US president declared in his speech that the time of Beijing’s “abuses” of the system was “over.”

“For years, these (trade) abuses were tolerated, ignored, or even encouraged,” he said in his UN speech, arguing that globalism had caused world leaders “to ignore their own national interests.

But a day later he sounded a more upbeat tone, cheering markets with comments that a trade deal with China could come sooner than thought.



Asian Markets Fall Amid US-China Tariffs

A Investor (not shown) looks at screens showing stock market movements at a securities company in Beijing on August 26, 2019.  WANG Zhao / AFP


Most Asian markets fell on Monday as fresh Chinese and US tariffs on goods worth hundreds of billions of dollars kicked in, though Donald Trump reiterated that the two sides were still due to hold talks this month.

Hong Kong was weighed down by another weekend of violence, fuelling worries about possible Chinese intervention in the financial hub, while the unrest has also hit property firms and Macau’s casinos.

Washington’s latest levies on imports from China took effect on Sunday and were followed by Beijing’s retaliation.

The measures are the latest in the long-running trade war between the world’s top two economies, which has rattled markets and hit growth across the globe.

READ ALSO: Hong Kong Students Defy China With Boycott

Still, Trump said negotiators would meet this month to discuss the issue. “We are talking to China, the meeting is still on,” he told reporters.

However, analysts warned there was unlikely to be any end in the near term.

“After a rough August traders should buckle up for more volatility in September,” said Neil Wilson, chief market analyst at “Trade and tariffs continue to gnaw away at investor confidence.”

Tokyo and Sydney each ended 0.4 percent lower, while Singapore shed 0.8 percent, with Manila, Bangkok and Jakarta also down.

But Shanghai rose more than one percent after a better-than-expected reading on Chinese factory activity, though another index showed the sector remained in contraction and investors remain uncertain about the outlook as the trade war bites deeper. There were also gains in Seoul, Wellington and Taipei.

Violence grips Hong Kong 

Hong Kong sank 0.4 percent after a weekend that saw some of the worst violence since protests began three months ago, with the airport targeted again, and demonstrators have called for a general strike on Monday though there was little sign that had been heeded.

The unrest has dragged a range of sectors, with tumbling tourist numbers hitting casinos and hotel chains, while real estate shares are also being sold off.

“Markets are fretting on the increased likelihood of direct Chinese intervention and what that would mean for the future of one of Asia’s leading financial centres,” said Jeffrey Halley, senior market analyst for Asia-Pacific at OANDA.

“The answer is, not good, to put it bluntly. The economic impact will surely show in Hong Kong data going forward and may temper the mood of equity traders in Asia as the new month begins.”

Oil prices were mixed after Friday’s steep losses owing to worries about the impact of the trade war on demand, while dealers were also concerned about reports that the Russian output cut last month fell short of an agreement with OPEC.

“A fissure is forming in OPEC+ compliance, which saw oil prices crater,” said Stephen Innes, APAC Market Strategist at AxiTrader.

“On the surface, while it is not likely a significant divergence, it’s the messaging that Russia is sending that spooks markets. While it could be little more than a tempest in an oil can at this stage, it’s worth monitoring nonetheless.”

Investors will be keeping an eye on markets in Argentina later in the day after the government imposed foreign-exchange controls on exporters following a week that saw a sharp drop in the peso.

In early trade London rose 0.5 percent, with traders bracing for a tough week in Westminster as Prime Minister Boris Johnson faces opposition from MPs across the political spectrum who have vowed legislation blocking a no-deal Brexit.

Also, EU negotiator Michel Barnier said the bloc will not change the divorce deal agreed with former PM Theresa May, fuelling expectations Britain will crash out with no agreement in place.

Paris and Frankfurt were both 0.1 percent higher.

 Key figures around 0810 GMT 

Tokyo – Nikkei 225: DOWN 0.4 percent at 20,620.19 (close)

Hong Kong – Hang Seng: DOWN 0.4 percent at 25,626.55 (close)

Shanghai – Composite: UP 1.3 percent at 2,924.11 (close)

London – FTSE 100: UP 0.5 percent at 7,240.73

Pound/dollar: DOWN at $1.2145 from $1.2162 at 2100 GMT

Euro/dollar: DOWN at $1.0981 from $1.0992

Dollar/yen: DOWN at 106.25 yen from 106.26 yen

Euro/pound: UP at 90.42 pence from 90.37 pence

West Texas Intermediate: UP five cents at $55,15 per barrel

Brent North Sea crude: DOWN four cents at $59.21 per barrel (new contract)

New York – Dow: UP 0.2 percent at 26,403.28 (close)


China Losing Millions Of Jobs Over Trade War, Says Trump

A salesman with Chinese made shoes at a store in the Chinatown area of Los Angeles, California on August 24, 2019. Mark RALSTON / AFP


President Donald Trump on Monday said trade talks with China were “more meaningful than at any time” because the United States was doing well while China was “losing millions of jobs”.

“I think anything is possible,” Trump said when asked about what he would do next in his trade war with Beijing.

“I can say we are having very meaningful talks, much more meaningful, I would say, than at any time.

READ ALSO: Merkel Hails ‘Big Step Forward’ In Talks With Iran

“I think, for the most part, it’s because we are doing very well. China is a great country, I consider President Xi (Jinping) to be a great leader,” he added during a press conference with German Chancellor Angela Merkel.

“Look, they are losing millions and millions of jobs, they’re going to other countries and if I was them, I’d want to make a deal.”

Earlier, Trump said Chinese officials had made contact on Saturday evening and said “let’s get back to the table. So we’ll be getting back to the table.”

The United States is trying to force China into deep reforms of its trading model to end the theft of intellectual property, lower subsidies and open up Chinese markets to US companies.


China’s Yuan Sinks To Weakest In 11 Years Amid Trade Tension

FILES) This file photo taken on August 8, 2018 shows bundles of 100 yuan (14.6 USD) notes at a bank in Shanghai.  Johannes EISELE / AFP


China’s currency slid on Monday to its weakest point in more than 11 years as concerns over the US trade war and the potential for global recession weighed on markets.

The onshore yuan was around 7.1425 to the US dollar in late morning Asian trading, its weakest point since early 2008, but slightly off lows reached earlier in the day.

Global economic tensions have intensified in recent days with the Washington and Beijing raising tariffs on each other’s imports, President Donald Trump calling on US businesses to leave China, and the fracas fuelling warnings of a worlwide downturn.

READ ALSO: US-China Trade Talks ‘To Start Very Shortly’ – Trump

The yuan is not freely convertible and the Chinese government limits its movement against the dollar to a two percent range on either side of a figure that the central bank sets each day to reflect market trends and control volatility.

The People’s Bank of China has set that rate steadily weaker in recent weeks and on Monday put it at 7.057 to the dollar.

Allowing the yuan to depreciate makes Chinese exports cheaper, and offsetting some of the burden of punitive US tariffs.

“The gloves are coming off on both sides and as such yuan depreciation is an obvious cushion against US tariffs,” Mitul Kotecha, a senior emerging markets economist at Toronto-Dominion Bank told Bloomberg news.

“As long as China can ensure that yuan weakness is well controlled, i.e. it does not provoke strong outflows, expect to see further depreciation in the currency.”

The yuan breached the key 7.0 threshold against the dollar earlier in August, just days after the US announced plans to impose fresh tariffs on Chinese imports from September 1.

The plunge past 7.0 prompted Washington to officially brand Beijing a “currency manipulator” and raised fresh concerns that the two sides were weaponising economic policies.

US politicians have long accused China of keeping its currency artificially low in order to increase the competitiveness of its manufacturers.

But Washington had previously refrained from branding China a “manipulator”, as that was seen as a significant escalation in trade tension between the world’s two biggest economies.

The designation is largely symbolic, however, as it calls for consultations with countries found to be manipulating.

But it could gain teeth if the Commerce Department begins imposing tariffs on countries determined to be undervaluing their currencies, as the department earlier this year said it plans to do.

Trump this month angrily accused Beijing of weakening the yuan “to steal our businesses and factories”.

A statement by the office of US Treasury Secretary Steven Mnuchin after the “currency manipulator” tag was applied said he would engage the International Monetary Fund “to eliminate the unfair competitive advantage created by China’s latest actions”.


US-China Trade War Worsens As Trump Slams Beijing

Traders work on the floor of the New York Stock Exchange (NYSE) on August 23, 2019 in New York City. The three major U.S. stock indexes ended lower, being their fourth consecutive week with some declines. Eduardo Munoz Alvarez/Getty Images/AFP


The United States and China exchanged blows Friday as each side increased punitive tariffs on the other, intensifying a trade war that is threatening to engulf the global economy.

In a rapid back-and-forth, Beijing took action against $75 billion in American goods in response to US tariffs announced August 1, and President Donald Trump lashed out in return by increasing existing and planned tariffs on a total of $550 billion in Chinese products.

Trump’s blistering Twitter screeds called into doubt chances for a quick resolution to the trade war between the world’s economic superpowers, which by the end of the year will cover nearly all imports and exports exchanged between the two countries.

Accusing China of “taking advantage of the United States on Trade, Intellectual Property Theft, and much more,” Trump said, “we must Balance this very…. …unfair Trading Relationship.”

Existing 25 percent tariffs on $250 billion in Chinese goods will increase to 30 percent starting October 1, Trump said.

And tariffs on $300 billion in products, due to take effect September 1 at 10 percent, will now be set at 15 percent, he said.

“China should not have put new Tariffs on 75 BILLION DOLLARS of United States product (politically motivated!).”

While Beijing worked for three weeks on its multi-tiered tariff response, Trump’s promised retaliation — which came in a signature tweetstorm — was announced in less than 10 hours.

The rapidly changing conflict worries US companies, many of whom rely on China for inputs, for finished products they sell and for manufacturing.

“It’s impossible for businesses to plan for the future in this type of environment,” said David French of the National Retail Federation.

“The administration’s approach clearly isn’t working, and the answer isn’t more taxes on American businesses and consumers. Where does this end?”

 Ordered to move 

The attack came with Trump expected to ruffle feathers in France at the weekend meeting of leaders of the G7 nations. Tensions are mounting between Trump and the Europeans, Canada and Japan over trade tariffs.

The friction has already slowed US growth and undercut the global economy, and the threat of a deterioration sent stock markets falling sharply.

The Dow lost more than 600 points to close with a loss of 2.4 percent. The German DAX lost more than one percent but London’s FTSE gained ground.

“Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing… your companies HOME and making your products in the USA.”

“We don’t need China and, frankly, would be far… better off without them,” Trump said.

It was unclear under what authority Trump could demand that private companies alter their production.

But the influential US Chamber of Commerce urged the two sides to return to the negotiating table to find a solution.

“While we share the president’s frustration, we believe that continued, constructive engagement is the right way forward,” Myron Brilliant, the business group’s head of international affairs, said in a statement.

China responds 

China’s punitive tariffs of five to 10 percent will apply to 5,078 US items, and are timed to start in tandem with the new US duties set to take effect in two steps September 1 and December 15, China’s state council tariff office said.

Beijing also announced it would reimpose a 25 percent tariff on US autos and a five percent tariff on auto parts, also starting December 15. China had lifted those tariffs earlier this year as a goodwill measure while trade talks were underway.

Trump already imposed steep tariffs on $250 billion in Chinese goods, with a further $300 billion in imports targeted in the coming rounds.

Beijing has hit back with duties on around $110 billion of US goods — or nearly all of the $120 billion worth of American goods it imported last year.

China’s commerce ministry said it will hit American frozen lobster, frozen chicken feet, peanut butter and 914 other goods with new 10 percent punitive tariffs starting September 1.

Soybeans, crude oil and other energy goods face 5 percent tariffs.

US-made mango juice, electric buses and chemical products face 10 percent duties come mid-December while smaller aircraft, hand pumps and bearings will be hit with 5 percent taxes.

Federal Reserve Chair Jerome Powell warned in a speech Friday that trade tensions were exacerbating the global slowdown and the central bank does not have a “rulebook” for dealing with the fallout.

But he also vowed to “act as appropriate” to sustain the sustain the US economy.

An alarm bell went off in the US Treasury bond market last week when 10-year bond yields briefly fell below the yields offered on a two-year bond — seen as a sign of looming recession — and it happened again Friday.

US officials have said in recent days that trade talks with China would continue next month.

However China’s commerce ministry spokesman Gao Feng said Thursday he had no information on the next round of meetings, while noting the two sides remain in contact.


US Trade Talks With China ‘Very Productive’ – Trump

US President Donald Trump/ AFP


US President Donald Trump said trade talks with China were “very productive” Tuesday after US and Chinese negotiators spoke by telephone.

His administration announced earlier that it was delaying tariffs on key consumer electronic goods imported from China.

READ ALSO: Chinese, US Trade Negotiators Speak On Phone

“We had a very good talk with China,” Trump said, describing it as “very productive.”


Chinese, US Trade Negotiators Speak On Phone

(From L) US Trade Representative Robert Lighthizer, Chinese Vice Premier and lead trade negotiator Liu He and US Treasury Secretary Steven Mnuchin talk before the opening session of trade negotiations at the Diaoyutai State Guesthouse in Beijing on February 14, 2019. 
Mark Schiefelbein / POOL / AFP


Chinese and American trade negotiators spoke on the phone on Tuesday, state media reported, two weeks after US President Donald Trump ratcheted up tensions by announcing fresh tariffs on Beijing’s exports.

China’s chief negotiator Vice Premier Liu He and Commerce Minister Zhong Shan spoke with their US counterparts, Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer, the Xinhua news agency said, adding that Beijing issued “a solemn protest” against the punitive duties set to come into effect on September 1.

The report emerged as the US announced it would delay imposing the 10 per cent tariffs on Chinese electronics until December 15, but would proceed with the new duties on other goods.

READ ALSO: US Trade Talks With China ‘Very Productive’ – Trump

As Washington and Beijing work to resolve the escalating trade war, Lighthizer and Liu have scheduled another call in two weeks, a USTR official told AFP.

The two sides were due to hold another round of meetings in Washington in September, but the deterioration in relations in the past two weeks cast doubt on whether the talks would take place.

The latest tariffs, which Trump announced on August 1, mean all Chinese imports into the United States would be subject to additional duties.


Trade War: US, China To Hold Talks Next Week – Mnuchin

Workers unloading bags of chemicals at a port in Zhangjiagang in China’s eastern Jiangsu province.  Johannes EISELE / AFP


US and Chinese officials will hold two days of talks in Shanghai next week to try to make progress on their year-long trade dispute, US Treasury Secretary Steven Mnuchin said Wednesday.

It will be the first face-to-face meeting since talks collapsed in May after President Donald Trump accused Beijing of reneging on its commitments.

Mnuchin said he and US Trade Representative Robert Lighthizer will lead the US delegation.

Mnuchin said on CNBC he hopes to make progress but added there are “a lot of issues” pending so he expects another round of talks would follow in Washington.

READ ALSO: Four Chinese Indicted In US For Aiding North Korea’s Weapons Programme

Senior officials have spoken by phone twice in the last two weeks in the bid to jump-start the negotiations.

At a meeting in Japan last month, US President Donald Trump and his Chinese counterpart Xi Jinping agreed to cease further hostilities in the year-long trade war while the two sides worked to revive negotiations.

The countries have imposed tariffs on $360 billion in two-way trade and Trump has threatened even more punishing duties on Chinese goods.

Mnuchin implied that the national security concerns that have led Washington to impose tough sanctions on Chinese telecom giant Huawei are on a separate track from the trade talks.

But he downplayed concerns about links between Google and Beijing.

“We’re not aware of Google working with the Chinese government in a way that raises concerns,” Mnuchin said.

“They assured us that there is very, very limited work. The only work they’re doing is some minimal open source work.”

Trump last week said he wants his administration to “take a look” into whether Google has been working with the Chinese government — an allegation swiftly denied by the US internet giant.


Trade War: US, China Negotiators Resume Talks

Workers unloading bags of chemicals at a port in Zhangjiagang in China’s eastern Jiangsu province. Johannes EISELE / AFP


Top US and Chinese negotiators held phone talks on Tuesday as the world’s top two economies seek to resolve their trade war, more than a week after they declared a truce.

Talks had broken down in May over US accusations that Beijing had reneged on its commitments, and the dispute escalated with the two sides exchanging steep increases in punitive tariffs.

But US President Donald Trump and Chinese leader Xi Jinping agreed to revive negotiations when they met on the sidelines of the G20 summit in Japan on June 29.

READ ALSO: Trade War: US, China Negotiators Resume Talks

US Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer spoke with Chinese Vice Premier Liu He and Commerce Minister Zhong Shan on Tuesday.

White House economic adviser Larry Kudlow told reporters the talks “went constructively” but it was “too soon for details.”

In an interview with the Fox Business Network, Kudlow described the discussions as “preliminary” and said meetings will “probably” be arranged, but did not give more details.

Kudlow noted that Trump has agreed to hold off on imposing new tariffs and will allow certain US products to be sold to Chinese telecom giant Huawei.

“Having said that, we have a very strong — I want to underscore this — a very strong expectation that China will really shortly, maybe immediately, begin to purchase US agricultural products,” he told the US broadcaster.

The Chinese commerce ministry said in a brief statement that the two sides exchanged “opinions on implementing the consensus reached between the two countries’ heads of state in Osaka.”

Washington and Beijing have hit each other with punitive tariffs covering more than $360 billion in two-way trade and those duties remain in place.

After his meeting with Xi in Osaka, Trump said he would refrain from imposing tariffs on more Chinese products. He had previously threatened to put punitive duties on an additional $300 billion in Chinese exports.

He also triggered a backlash in the US Congress by agreeing to soften some US export restrictions on components to Huawei, though Trump stipulated that officials would take care to avoid creating new risks to US national security.

The United States had imposed tough sanctions on the company, whose equipment US officials fear could be used as Trojan horses for China’s intelligence services.

The ceasefire comes as the US presidential campaign has started ahead of the November 2020 election.

Asked about speculation that Beijing may be waiting to see how the race plays out, Kudlow said it “would be a very big mistake on their part.”

“I think that kind of thinking would probably do great damage to these trade talks,” he said.

But he suggested that the US was in no hurry to finalize a deal.

“Speed is not an issue, quality is the issue,” Kudlow said. “And so I make no forecast on that and reiterate this view.  There’s no timetable, none of that stuff.”


Trade War: China, US Will ‘Lose By Fighting’, Xi Tells Trump

China’s President, Xi Jinping US President Donald Trump



Chinese President Xi Jinping called for cooperation in a phone call with Donald Trump on Tuesday, confirming he would meet the US leader at the G20 summit amid a bruising trade war.

“China and the US will both gain by cooperating, and lose by fighting,” Xi told Trump, according to a readout by Chinese state broadcaster CCTV.

READ ALSO: Trump Says US To Begin Removing Millions Of Illegal Migrants


US Negotiators In Beijing For Trade War Talks

This photo taken on August 7, 2018 shows workers unloading bags of chemicals at a port in Zhangjiagang in China’s eastern Jiangsu province.  Johannes EISELE / AFP


US and Chinese negotiators on Monday held their first face-to-face talks since the world’s two largest economies agreed to a truce aimed at resolving their trade dispute.

The visiting delegation, led by Deputy US Trade Representative Jeffrey Gerrish, left its hotel in Beijing Monday morning without speaking to reporters for a first day of talks.

The two sides plan to continue discussions on Tuesday.

President Donald Trump raised hopes last week that an agreement could be found to end the months-long dispute, during which the world’s top two economies have imposed import duties on more than $300 billion of each other’s goods.

“I think we will make a deal with China,” Trump said on Friday.

“We have a massive trade negotiation going on with China. President Xi (Jinping) is very much involved, so am I. We’re dealing at the highest levels and we’re doing very well.”

Trump on Sunday headed to the US presidential retreat at Camp David, where he said he would discuss a trade deal with China with senior aides, among other issues.

The American delegation in Beijing includes officials from the Treasury, Commerce, Agriculture and Energy departments.

The talks come a month after Trump and Xi agreed to suspend a planned tariff hike for three months to give negotiators space to reach an agreement and end a dispute that has roiled world markets.

“Both China and the US agreed to follow through on the consensus reached by both leaders to conduct positive and constructive talks in resolving our dispute,” China’s foreign ministry spokesman Lu Kang told reporters on Monday, declining to provide further details.

“The trade friction between China and the US is not beneficial to anyone, or the global economy,” Lu said.

Market wobbles 

The ratcheting dispute has pummelled confidence in China, sending the stock markets tumbling while the yuan has fallen against the dollar.

Chinese stocks closed higher Monday as the trade talks got underway and the central banks in both Beijing and Washington signalled looser monetary policy.

China is grappling with a slowing domestic economy, with growth easing to 6.5 percent in the third quarter, as a battle against debt has ramped up.

The government has set a growth target of around 6.5 percent for 2018, down from 6.9 percent in 2017.

Since the truce announced last month, China has taken initial measures to support the negotiations.

Beijing suspended extra tariffs on US-made cars and auto parts for three months, while a major state grain stockpiler made purchases of American soybeans.

American electric car-maker Tesla broke ground Monday on a Shanghai factory, becoming the first foreign automaker to take advantage of liberalised ownership restrictions in the sector, official news agency Xinhua reported.

 No ‘white flag’ 

The manufacturing sectors in both countries have been hit by the trade dispute, with China’s contracting last month for the first time in over two years, according to official data.

But in a sign of how interconnected the two economies are, Apple shares dropped last week after the tech giant reported steeper-than-expected “economic deceleration” in the last quarter in China — one of its largest overseas markets.

The Beijing talks follow small signs of progress — and the absence of new threats from Trump — while the two sides work to ease trade tensions by March 1.

Trump initiated the hostilities because of complaints over unfair Chinese trade practices — concerns shared by the European Union, Japan and others.

The president has taken heart in China’s faltering economy, repeating that it makes Beijing more likely to strike a deal.

China’s foreign ministry disputed Trump’s assertions on Monday.

“We have adequate resilience and potential. We have full confidence in the long-term sound fundamentals of the Chinese economy,” said Lu.

And an editorial in the nationalist state-owned tabloid the Global Times suggested China would not cave to US demands.

“If Beijing had wanted to raise the white flag, it would have done so already,” it said.