We’ve previously mentioned that the US is in the middle of considering rolling back some tariffs on Chinese goods that were put in place back when Trump was in office. The reason is to try and make everyday goods cheaper for Americans in light of the country’s decade-high inflation.
With this, official statements from both China and the US have revealed that China’s Vice Premier Liu and US Treasury Secretary Janet Yellen had a call on Tuesday that was described as “candid,” to talk about macroeconomic issues, planting the seeds for a potential bigger announcement later. Their last known chat was in October, and the pair agreed to keep an open dialogue.
“The Chinese side expressed its concern over issues such as the lifting of additional tariffs and sanctions imposed by the United States on China, and fair treatment of Chinese companies,” the Chinese ministry said. “Both sides agreed to continue to maintain dialogue and communication.”
“The two sides agree that as the world economy is facing severe challenges, it is of great significance to strengthen macro-policy communication and coordination between China and the United States. And jointly maintaining the stability of the global industrial and supply chains is in the interests of both countries and the whole world,” the statement read.
“The tariffs’ negative impact on Chinese exports has been limited and so a reduction in them won’t have too big an impact either. The impact on US inflation would be limited too – prices in the US didn’t surge, for example, in 2019 when tariffs were in place.The more concerning thing for exports in the short term is a potential US recession. With or without the tariffs, China’s export growth will slow down anyway,” said Larry Hu, head of China economic analysis at Macquarie Group Ltd.